US bank stocks sink after New York Community Bancorp cuts dividend

A sign is pictured above a branch of the New York Community Bank in Yonkers, New York, U.S., January 31, 2024. REUTERS/Mike Segar

REGIONAL U.S. bank stocks sank on Wednesday, dragged by a 38% plunge in the shares of New York Community Bancorp after it cut its dividend and posted a surprise loss, renewing fears over the health of similar lenders.

The KBW Regional Banking Index closed down 6%, its biggest one-day drop since March 13 last year after New York's Signature Bank collapsed amid depositor panic sparked by the failure days earlier of Silicon Valley Bank.