Connect with us

Business

New York Community Bancorp Appoints DiNello as Executive Chairman Amid Moody’s Downgrade

Published

on

New York Community Bancorp Appoints Dinello As Executive Chairman Amid Moody's Downgrade

New York Community Bancorp (NYCB) has named Alessandro DiNello as its new executive chairman in an effort to stabilize the company’s operations following a recent credit rating downgrade by Moody’s Investors Service. The bank’s shares experienced a sharp drop, losing more than 20% on Tuesday before recovering slightly on Wednesday.

NYCB promoted DiNello from his previous role as nonexecutive chairman to work alongside CEO Thomas Cangemi in improving all aspects of the bank’s operations. This decision was made in response to concerns over management that emerged after the bank’s unexpected fourth-quarter loss, mounting losses on commercial real estate, and the need to reduce its dividend by 71% to strengthen capital levels.

Moody’s downgraded NYCB’s credit ratings two notches to junk status, citing numerous financial, risk-management, and governance challenges. The agency expressed concerns about turnover in the bank’s risk management leaders and warned that further downgrades could be possible. Moody’s highlighted the importance of control functions, particularly with respect to a bank’s risk awareness, as key indicators of a bank’s credit strength.

In addition to his role as executive chairman, DiNello will oversee the recruitment of new chief risk and audit executives who possess significant experience in managing risk within large banks. NYCB has been facing difficulties finding suitable candidates after the resignation of its previous chief risk officer and chief audit executive preceding the disastrous earnings report.

Despite the recent challenges, NYCB has reassured investors that it has not experienced significant deposit outflows from its retail branches. The bank attested to its ample liquidity to cover uninsured deposits and issued unaudited financial information to boost confidence. NYCB mentioned its commitment to reducing its exposure to commercial real estate and showed openness to selling non-core assets.

This appointment of DiNello and the realigned leadership structure aims to address concerns over management and revive investor confidence in NYCB amidst its recent struggles and the ongoing pressures faced by small and medium-sized banks in the industry.

Rachel Adams

Times News Global is a dynamic online news portal dedicated to providing comprehensive and up-to-date news coverage across various domains including politics, business, entertainment, sports, security, features, opinions, environment, education, technology and global. affairs. Our commitment lies in sharing news that is based on factual accuracy, credibility, verifiability, authority and depth of research. We pride ourselves on being a distinctive media organization, guided by the principles enshrined in Article 19 of the Universal Declaration of Human Rights. Made up of a team of ordinary people driven by an unwavering dedication to uncovering the truth, we publish news without bias or intimidation.

X WhatsApp