US bank Western Alliance denies report of exploring sale

US regional lender Western Alliance Bancorp on Thursday refuted media report saying that it was exploring strategic options, which sent the lender's shares down more than 60%.

The bank said it is not exploring a sale and neither has it hired and adviser to explore strategic options. 

"Considering all of our legal options in response to the article," the lender said referring to the Financial Times' article.

Earlier in the day, the Financial Times reported that Western Alliance was exploring strategic options including a potential sale of all or part of its business, citing two people briefed on the matter.

Three US regional banks have failed in the last two months, spurring widespread worries about the sector's stability and deepened concerns about lenders as nervous clients moved their money to bigger financial institutions.

PacWest Bancorp said late on Wednesday it was in talks with potential partners and investors about strategic options.

First Republic's collapse, the third major casualty of the biggest crisis to hit the US banking sector since 2008, rekindled a slide in shares of regional lenders this week despite regulatory efforts to staunch the turmoil that began with the collapse of Silicon Valley Bank in March.

PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

Its shares have lost 72% of their value this year, making it one of the worst performers on the small-cap S&P 600 regional banks index, which has lost a third of its value in the same period.

In another sign of stress within the sector, First Horizon Corp and Toronto-Dominion Bank Group agreed to call off their $13.4 billion merger on uncertainty over getting regulatory approvals.

First Horizon shares slumped 40%, while US-listed shares of Toronto-Dominion Bank edged 1.4% higher.

US Federal Reserve Chair Jerome Powell on Wednesday reiterated the banking system remains resilient despite "strains" in March, after the central bank delivered a 25-basis rate hike and signaled a pause in the tightening cycle was on the table.

With inputs from Reuters