Leumi's shares in Valley National Bankcorp, which were worth NIS 3.6 billion at the end of 2022, are currently worth just NIS 2 billion.
Bank Leumi (TASE:LUMI) share price fell 2.62% yesterday due to concerns about US bank Valley National Bancorp, in which Leumi has a 14% stake. However, Leumi has recovered somewhat and its share price is 1.04% higher today.
Valley National's share price has fallen nearly 20% since Raymond James analyst Steve Moss cut his rating on the US bank from strong buy to market perform, due to potential revenue concern. Moss is concerned that rising deposit and funding costs at Valley National have accelerated. Moss's concerns set off investors who are already jittery about runs on US banks.
Last year Leumi merged Leumi US into Valley National, recording a profit of NIS 645 million, while maintaining a 14% stake in Valley National. Leumi's shares in Valley National, which were worth NIS 3.6 billion at the end of 2022 are currently worth just NIS 2 billion, leaving the Israeli bank with a large loss on paper.
Published by Globes, Israel business news - en.globes.co.il - on May 3, 2023.
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Valley National credit: Tupungato Shutterstock