New York Community Bancorp (NYSE:NYCB) found itself in a bit of a quagmire this week, grappling with a substantial provision for credit losses tied to two problematic loans and bracing itself to meet stricter capital regulations.

Keeping pace with this uncertainty, financial stocks marked time. The Financial Select Sector SPDR ETF (NYSEARCA:XLF) inched up 0.9% for the week, while the S&P 500 inched up 1.4%.

Regional banks led declines this week, with four of the five biggest decliners hailing from this sector. On the flip side, South Korea-based banks emerged as the major gainers, fueled in part by an encouraging outlook for the country’s exports.

New York Community Bancorp (NYCB) faced the brunt of the market storm, with its stock plummeting by a jaw-dropping 42% during the week ending Friday, Feb. 2, significantly impacting financial stocks with a market capitalization over $2 billion. The company surprised the market with a Q4 loss resulting from the provision for credit losses, prompting at least four firms to downgrade the stock.

MarketAxess (NASDAQ:MKTX) also took a hit, with its stock tumbling 19% despite a Q4 earnings beat. Similarly, Bank OZK (NASDAQ:OZK) dropped 12% as fears stemming from NYCB spilled over to the Little Rock, Arkansas-based bank, given its heavy exposure to commercial real estate in its loan book. Tupelo, Mississippi-based Cadence Bank (NYSE:CADE) and Valley National Bancorp (NASDAQ:VLY) also witnessed slides of 11% each, further amplifying the decline in the financial sector.

Amidst this turbulence, South Korea-based banks emerged as beacons of hope, with KB Financial Group (NYSE:KB) realizing a remarkable 23% surge in its stock price. Shinhan Financial Group (NYSE:SHG) climbed 13% and Woori Financial Group (NYSE:WF) increased by 11%. The country’s export growth piqued investor interest, prompting Bank of America to upgrade Shinhan and Woori to ‘Buy’ as the week progressed.

Banco Bilbao Vizcaya Argentaria (NYSE:BBVA) painted a different picture, rising by 9.9% after posting Q4 2023 adjusted EPS of EUR 0.34, a significant improvement from EUR 0.25 in the year-ago quarter. Piper Sandler (NYSE:PIPR) also had reason to celebrate, advancing 8.2% on the back of better-than-expected Q4 earnings and revenue.