Crisis of Confidence Hits Regional Bank Shares

[Hissyspit]

Source: Reuters

Crisis of confidence hits regional bank shares

By Jonathan Spicer and Juan Lagorio
13 minutes ago
NEW YORK (Reuters) - Shares of regional banks sank on Monday, with Sovereign Bancorp (SOV.N) and National City Corp (NCC.N) down 60 percent, as investors feared the sector would be steamrolled by the deepening global credit crisis.

As Wall Street sagged after the House of Representatives rejected a $700 billion bailout plan, investors wondered which banks might need a merger partner in order to survive amid the upheaval in the financial system.

And while losses mounted among big U.S. financial institutions such as Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N), the regional banks received the hardest punch in what analysts called a deepening crisis of confidence.

Among losers, Fifth Third Bancorp (FITB.O) dropped 36 percent, FirstFed Financial Corp (FED.N) gave up 44 percent, and KeyCorp (KEY.N) slumped 18 percent. The closely watched S&P Financial index (.GSPF) sank 10 percent. "There will be a large number of smaller banks that will likely have significant problems across the (U.S.) Southeast and Southwest," said James Ellman, portfolio manager of hedge fund Seacliff Capital.

Read more: http://news.yahoo.com/s/nm/20080929/bs_nm/us_financial_banks

[Roland99]

1. Tomorrow will be very interesting.