Regions Financial Corp. $(RF)$, KeyCorp $(KEY.AU)$ and Fifth Third Bancorp $(FITB)$ top a list of nine regional banks as measured by total available liquidity to cover potential deposit outflows, Citi banking analyst Keith Horowitz said in a research note on Thursday. Regions currently has about 145% of available liquidity to cover its uninsured deposits, followed by 136% for KeyCorp and 134% for Fifth Third Bancorp. Comerica $(CMA)$ ranks at the bottom of the list with 96% coverage of its uninsured deposits; also U.S. Bancorp $(USB)$ with 98% and Citizens Financial Group Inc. (CFG) with 108%. "We recognize that funding the balance sheet with wholesale funding would present a material earnings headwind, but the purpose of this exercise is to show that sufficient liquidity is available even in the case of significant deposit outflow," Horowitz said. Debt levels reported by the Federal Home Loan Bank, which provides extra debt to bank, has leveled off, which "suggests either banks' demand for immediate funding has cooled, or they are turning to other facilities," Horowitz said. The KBW Nasdaq Bank Index is down 22.6% so far in 2023 as the March 10 failure of Silicon Valley Bank has impacted the sector, compared to a 2.8% year-to-date increase by the S&P 500 . The Financial Select SPDR Fund $(XLF)$ has fallen 9.3% in 2023.
-Steve Gelsi
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March 24, 2023 06:55 ET (10:55 GMT)
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