Western Alliance latest US bank to explore sale amid sectoral crisis: Report

Shares of Western Alliance plunged by 45% before trading was halted

Western Alliance is the latest American lender to explore a sale amid the crisis that has plagued the country's banking sector, a report said on May 4.

The bank is considering "strategic options", which include a potential sale of a portion or all of its business, the Financial Times reported, citing two sources privy to the development.

The Arizona-based lender is at an early stage of the deliberations, the newspaper said, adding that there is also a possibility that the discussions may not lead to any concrete decision.

The report came shortly after another lender PacWest, based in Los Angeles, said in a statement that it plans on selling off some assets to free up cash on its balance sheet.

Western Alliance shares plunged 45 percent, even as the bank put out a statement earlier in the day saying it has not experienced any unusual withdrawals and plans to readjust its balance sheet were underway. The stock value has eroded by around 60 percent so far this year.

Over the past two months, three US regional lenders - Silicon Valley, Signature and First Republic - declared a failure, which has sparked concerns of a larger banking sector contagion.

In another sign of potential trouble for the industry, a major deal was called off on May 4. Toronto-Dominion (TD) Bank Group and First Horizon Corp said they called off a planned merger, citing regulatory hurdles. TD Bank had said in February that it was buying regional bank First Horizon in a $13.4 billion all-cash deal.

Despite the turmoil, US Federal Reserve Chair Jerome Powell, while announcing a quarter-point hike in the benchmark lending rates on May 3 said the banking system continues to remain "resilient".