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U.S. stock markets were rattled on Thursday

Global bank stocks sell off as fears mount over bad loans

Fri, Oct. 17, 2025
Banking stocks
Banking stocks

Banking stocks across the globe sold off on Friday, as fears about bad U.S. loans spilled over into equity markets beyond the United States.

U.S. stock markets were rattled on Thursday amid mounting concerns about poor lending practices, after lenders Zions and Western Alliance disclosed bad loans.

Banking stocks were hit hard, with positive earnings reports in the sector unable to offset the apprehension. The concern builds on pre-existing unease over lending following the bankruptcy of two autos-related firms this year, which prompted a call from JP Morgan boss Jamie Dimon that “when you see one cockroach, there are probably more.”

In pre-market trade Friday, shares of major U.S. lenders faltered. JP Morgan was last seen trading 1.5% lower, while Citi was down 1.9% and Bank of America was down 2.9%.

In European trade, meanwhile, the regional Stoxx Banking Index fell almost 3% Friday. Shares of major lenders moved lower, with Spain’s Sabadell, the target of a recently failed takeover by rival BBVA, shedding 8.9%. Germany’s Deutsche Bank fell by 6.9%, and British banking giant Barclays was down 5.4%.

Some banks listed in the Asia-Pacific region also faltered over the course of the trading day. Japanese financial companies with exposure to U.S. markets were particularly hard hit, with lender Mizuho Financial Group falling by 4%, while insurers Sompo Holdings and Tokio Marine lost 4.7% and 3.5%, respectively. Hong Kong-listed shares of HSBC retreated 2%.

It comes after shares of America’s regional lenders and investment bank Jefferies sold off Thursday on news of poor lending practices. Zions Bancorporation lost more than 13%, while Western Alliance Bancorp fell more than 10%. The SPDR S&P Regional Banking ETF (KRE) dropped over 6% by the end of the session, with only one of the fund’s constituents ending the day in positive territory.

Pre-market trading indicated an extension of those losses on Friday, with Zions moving 1.1% lower and Western Alliance down by 1.5%.