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2025-10-17 22:11:03
[Morgan Stanley: Market Overreacts to Zions Fraud] Zions Bancorp recorded a huge loss in the third quarter and disclosed that some borrowers were suspected of fraud and were also linked to several other lenders. The news sparked investor concerns and led to a sharp sell-off in the stock price. Morgan Stanley analysts said in a research report: "We believe that the market's initial reaction is excessive, especially since there is currently no evidence of other or ongoing problems at the bank." Analysts pointed out that although there is still a risk of further loss provisions after the independent review, this risk is limited because Zions has limited exposure to loans to NDFIs (non-deposit taking financial institutions). NDFIs refer to institutions that do not accept deposits but provide financial services. Zions' stock price rose 2.9% on Friday after a 13% plunge on Thursday.
