Stocks of Charlotte’s biggest banks plunged Friday morning in the wake of Britain’s historic vote to leave the European Union.
Shortly after markets opened, Bank of America’s shares slumped 5.2 percent to $13.31. Wells Fargo shares were down 3.3 percent to $46.31. Charlotte-based Bank of America and San Francisco-based Wells Fargo are Charlotte’s largest banks by deposits.
Major indexes were also rattled over worries the Brexit vote could trigger recessions in the U.K. and elsewhere. The S&P 500 was down 2.1 percent, while the Nasdaq posted a 2.4 percent drop. The Dow Jones Industrial Average fell 1.8 percent.
The vote is creating worries for banks, whose revenues could suffer if demand for lending from businesses falls in the Brexit aftermath. The vote comes at a time when banks are already slashing jobs in an era of low interest rates that challenge their ability to grow profits.
Never miss a local story.
Winston-Salem’s BB&T, Charlotte’s third-largest bank by deposits, dropped about 3.8 percent to $35.55.
Stocks of Charlotte’s smaller banks also fell.
The parent company of Charlotte-based Park Sterling Bank saw a 3 percent slide to $3.06.
Charlotte-based Capital Bank Financial Corp. fell about 3.4 percent to $30.22.
The vote to leave the EU will cause negative impacts on large U.S. banks, which could face higher costs and weakened capital markets activity, according to a report last week from Keefe, Bruyette & Woods. Among banks, JPMorgan Chase & Co. and Goldman Sachs have the most exposure to Brexit fallout because of the relatively large amount of income the two companies generate from U.K. entities, the report says.
In the long term, the impact will be a wash for the largest U.S. banks, but the firms may face revenue and expense challenges over a two-year transition following the vote, according to the report.
In early trading, New York-based Citigroup was down 8.1 percent. New York’s JPMorgan fell about 4.7 percent.