Why did the Bank of Queensland share price just hit a multi-year low?

Person with thumbs down and a red sad face poster covering the face.Person with thumbs down and a red sad face poster covering the face.

As most investors would be painfully aware by now, the S&P/ASX 200 Index (ASX: XJO) has had a truly awful week so far. Yesterday, the ASX 200 lost 0.5%, which has been backed up by today’s savage 1.64% sell-off (so far).

But let’s check out the damage that has been done to the Bank of Queensland Ltd (ASX: BOQ) share price. Bank of Queensland shares have had an even worse time of it today. This ASX 200 bank share has lost a nasty 2.55% at the time of writing, which puts the bank at $6.49 a share.

It was worse for this regional ASX bank this morning too. At one point, Bank of Queensland shares got down to a low of $6.32 each. Not only is that a new 52-week low for the Bank of Queensland share price, but it is the lowest this ASX 200 share has traded at since October 2020:

So why are Bank of Queensland shares seemingly getting singled out for punishment on the ASX this week?

ASX 200 bank shares feel the squeeze

Well, the first thing to note is that it’s not just Bank of Queensland that is feeling the pain. As we touched on earlier, it is the entire ASX 200 that is having a rough time of it this week. It’s hard to find an ASX 200 share outside the gold sector that is having a decent week thus far.

But ASX 200 banks seem to be getting especially hard hit by this bout of selling. All of the ASX 200 banks are down substantially over the past few days. But it seems to be the smaller banks outside the Big Four that are getting the biggest caning.

Case in point, since last Friday, the Commonwealth Bank of Australia (ASX: CBA) share price has lost 0.87% of its value. Westpac Banking Corp (ASX: WBC) shares are faring worse, down around 2%.

Why is the Bank of Queensland share price at a two-year low today?

But Bank of Queensland has lost around 4.3% over the same period. Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are down by 2.35%. And Macquarie Group Ltd (ASX: MQG) has lost more than 4.5%.

So what’s going on here?

Well, it’s no secret that the woes that the ASX has been experiencing this week largely stem from the ructions we’ve seen over on the US markets with the collapse of the US bank SVB Financial Group. When banks run into trouble, it tends to really spook investors. This is because it could indicate problems with the entire financial system.

As such, we’ve seen bank shares all around the world come under pressure over the past few days. One of the largest US banks – Bank of America Corp – has lost close to 17% over the past week alone.

Smaller banks can be deemed riskier simply due to their size and lack of scale compared to larger banks. As such, they are often shunned by investors in times of strife. This probably explains why the Bank of Queensland, share price, along with the other smaller ASX bank shares, are faring worse than the big banks today.

The post Why did the Bank of Queensland share price just hit a multi-year low? appeared first on The Motley Fool Australia.

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More reading

SVB Financial provides credit and banking services to The Motley Fool. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen owns shares of Bank of Queensland. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bank of America and SVB Financial. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool Australia has recommended SVB Financial and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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