Bank Stocks Careen Toward Worst Month Since SVB Sparked Crisis

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It’s been more than five months since Silicon Valley Bank failed, but you wouldn’t know it from looking at bank stocks.

The KBW Bank Index has fallen more than 9% in August, putting the sector on pace for its worst month since the Spring chaos. The gauge is now back where it was in March, when fear gripped the group after the sudden collapse of SVB and Signature Bank.

“We’re slowly getting clarity, but there are just so many of these things that are going to take a while before, in the aggregate, investors are really comfortable,” said Piper Sandler analyst R. Scott Siefers. “We need a little more certainty on the path of rates, we need a little more certainty on the path of the economy at large.”

“Ideally we get better roadmaps at the individual company level as to how these banks intend to respond to some of these regulatory interventions,” Siefers said.Bank stocks have come under pressure this year after SVB and Signature sparked fears over deposit flight. And while the sector has bounced off the lows it hit in May around the failure of First Republic Bank, the KBW Bank Index remains down roughly 19% on the year, a sharp underperformance compared to the S&P 500’s 18% gain.

While money has started to make its way back into the financial sector, most of that is going to financial services companies including credit-card issuers and fintech shares, and less so to bank stocks.

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