The financially troubled New York Community Bancorp (NYSE:NYCB) is receiving a lifeline in the form of a capital investment worth more than $1 billion.
The Wall Street Journal, citing unnamed “people familiar with the matter,” reported that Liberty Strategic, Citadel Securities and members of NYCB’s management are participating in the capital investment. The bank has been in tumult stemming from its commercial real estate lending, resulting in CEO Thomas Cangemi’s resignation after the $252 million fourth quarter loss was amended to $2.7 billion – which led to the bank’s credit grade being downgraded by two credit rating agencies.
The bank’s problems touched off concerns of a reprise of the 2023 banking crisis that saw the demise of three regional lenders. However, NYCB’s problems have not been shared with other lenders, and the Journal reported the new CEO, Alessandro DiNello, has put forth strategies to strengthen its balance sheet, which could include the sale of noncore business assets, along with exploring “newfangled financial instruments that would share the risks of those loans with outside investors, people familiar with the matter said.”
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