A troubled New York bank has received a $1 billion capital injection in an effort to stay afloat. New York Community Bank announced the investment, led by former U.S. Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital.
Financial Struggles
NYCB has been struggling with exposure to the commercial real estate market and the impact of recent interest rate hikes. The bank also acquired a large portion of the collapsed Signature Bank last year.
Leadership Changes
Last week, NYCB fired its CEO and replaced him with Joseph Otting, the former Comptroller of the Currency.
Investor Confidence
Mnuchin expressed confidence in the investment, stating that it would stabilize the bank and provide sufficient capital to cover potential losses.
Stock Surge
The announcement of the liquidity injection sent NYCB’s stock soaring by 96%, from $1.76 to $3.46. However, the stock remains well below its January 2024 price of $10.41.
