The Bank of Queensland Ltd (ASX: BOQ) share price is down a slender 0.3% in morning trade on Wednesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $5.84. Shares are currently swapping hands for $5.82.

It’s not just the Bank of Queensland share price that’s in the red today. In fact, the smaller bank is holding up better than its big four rivals.

Following yesterday afternoon’s surprise interest rate hike from the RBA and another day of losses in US markets, the ASX 200 is down 0.8% at this same time.

With the big banks all under pressure as well today, the S&P/ASX 200 Financials Index (ASX: XFJ) is down 1.5%.

Bank of Queensland share price dips amid US regional banking crisis

The fallout from the ongoing turmoil in US regional banks could throw up more headwinds for the Bank of Queensland share price and the broader financial sector over the coming weeks.

It was only Monday night Aussie time that the remnants of First Republic Bank were acquired by US banking giant JPMorgan.

The second-largest US bank failure in history came sharp on the heels of the collapse of US regional banks Silicon Valley Bank and Signature Bank in March. Fallout from those implosions helped send Credit Suisse to the brink before it was quickly taken over by UBS.

But it appears investors remain very jittery about the outlook for regional banks in the US.

In US markets yesterday shares in Western Alliance Bancorporation (NYSE: WAL) tumbled 15%. That puts the bank stock down 59% since 6 March.

Things were even more dire for PacWest Bancorp (NASDAQ: PACW). The PacWest share price crashed 28% yesterday. PacWest shares are now down 76% since 6 March and trading at all-time lows.

Which certainly helps put today’s 0.3% retrace in the Bank of Queensland share price in perspective.

What the experts are saying

Commenting on the latest sell-offs in US regional banks, Ed Moya, senior market analyst at Oanda said (quoted by Bloomberg):

Wall Street is quickly hitting the sell button as banking turmoil appears it is not going away anytime soon. Risk appetite did not stand a chance as traders focused on lingering doubts over the regional banks, rising recession odds, and growing risks that the US could default on its debt next month.

David Hunt, CEO of PGIM, cautioned that with tighter financial regulations in the pipeline, there’s likely to be more pain for the US economy ahead following the takeover of First Republic.

“There is a little bit of a tendency to kind of breathe a sigh of relief on mornings like this. Actually, we’re just starting the implications for the US economy,” he said (quoted by The Australian Financial Review).

Hunt continued:

First of all, we’re going to see a real ratcheting-up of regulation in the banking system, particularly on many … regional lenders… What that will do is … further hinder the supply of credit that’s going into the economy. And I think that we are going to see now a real slowing that begins to happen to aggregate demand.

Citigroup CEO Jane Fraser sounded a bullish tone on the outlook for US banks.

“When you take a step back and look at the structure of the US financial system, it’s incredibly sound,” she said.

Bank of Queensland share price snapshot

Over the past 12 months, the Bank of Queensland’s share price has dropped 28%. Shares are down 14% so far in 2023.

The post Bank of Queensland share price dips following more losses for US regional banks appeared first on The Motley Fool Australia.

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• Lowest ASX bank yield: Are CBA shares still worth it?
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Western Alliance Bancorporation. The Motley Fool Australia has no position in any of the stocks mentioned. 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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