The financial system was already on tenterhooks after New York Community Bancorp reported higher-than-expected future losses on its commercial real estate loans last month. Now the lender has reported $2.4 billion more in losses amid the discovery of “material weaknesses” in its internal controls. Specifically, it has booked a goodwill impairment in the fourth quarter tied to the value of transactions before the 2008 financial crisis.  Earlier this month NYCB had reported a 2023 Q4 loss of $252 million.

At first it was thought that the bank’s losses were largely related to the deposits and loan assets it acquired from failed Signature Bank last year. It added a $552 million provision for future credit losses, plus $185 million in net charge-offs, plus cut dividends by 70% to bolster capital. Since then the bank has spent weeks trying to assuage the market’s concerns about its stability.

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Erika Morphy


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