Shares of East West Bancorp Inc. (EWBC) suffered a massive decline of 23.2% during the morning trade on Monday, which marked their second-greatest one-day sell-off in the organization’s history. The Pasadena, California-based bank was prompted to reassure its investors about its “capital and balance sheet strength” in the wake of recent bank failures. The stock has now plummeted 33.9% in just three days of trading, following public news of troubles faced by SVB Financial Group (SIVB).
The ongoing market volatility has severely impacted the financial sector, with a ripple effect felt across diverse global markets. As per the latest reports, East West Bancorp selloff has been attributed to investors’ fears that the bank could face loan losses if the coronavirus outbreak leads to widespread business closures and job losses.
Despite this setback, East West Bancorp has maintained its position on the S&P’s 100 Most Trustworthy Companies list for two consecutive years, demonstrating its commitment to long-term stability and performance. The recent downturn in share values is predominantly attributable to current industry conditions, which have impacted all major banks’ stock values in recent weeks.
East West Bancorp has issued a statement reassuring investors that its business is still very much operational and that its fundamentals remain strong. The company has managed to build its reputation on solid foundations, with a focus on building long-term relationships with its stakeholders. The bank has a diversified loan book that includes a range of sectors and industries, with no over-concentration in any particular areas.
East West Bancorp’s management team also maintains strict internal controls, compliance policies, and risk management procedures in place to safeguard the company’s stability and mitigate any potential risks arising from market volatility.
Another significant factor contributing to East West Bancorp’s sustainability in challenging times is its conservative credit culture. As one of the largest American banks serving the Chinese community, East West Bancorp has extensive experience managing credit risk in different business conditions, including changes in credit markets, fluctuating interest rates, and other risks.
In addition to this, the bank also has robust liquidity positions, as it has been building up its deposits for many years. Despite its comparatively sizeable loan book, East West Bancorp’s loan-to-deposit ratio is 89%, providing a considerable margin of safety for its depositors and stakeholders.
East West Bancorp also understands the importance of maintaining a strong and collaborative relationship with its clients, which enables it to serve as a trusted advisor to businesses that are navigating the current uncertain economic times. The bank’s deep knowledge of the Chinese-American community and its unique business environment has allowed it to build long-term relationships with its clients based on mutual trust and respect.
Moreover, the bank’s considerable experience in cross-border transactions also provides a competitive edge over some of its peers. East West Bancorp is known for offering exceptional services to businesses looking to expand into the Chinese market or those looking to invest in the US. Its expertise in cross-border transactions also extends to payment processing, trade finance, and foreign exchange transactions.
Despite the recent downturn in share values, East West Bancorp’s fundamentals remain robust. The bank remains committed to its long-term strategic vision of delivering value to shareholders, customers, employees, and other stakeholders. Its reputation for trustworthiness and excellence in customer service and corporate governance remains integral to the bank’s continued success.
The recent economic disruption has presented a formidable challenge for many organizations worldwide. However, East West Bancorp’s management team is confident that its sound business model, rigorous internal controls, and commitment to long-term sustainability will enable it to navigate these uncertain times and emerge even stronger.
