(Reuters) -First Republic Bank has received $30 billion in deposits from several big banks, the banks said in a statement on Thursday, as part of a rescue package for the lender. JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp, Wells Fargo & Co, Goldman Sachs Group Inc, Morgan Stanley and others are involved […]
First Republic Bank gets $30 billion in deposits from big banks
(Reuters) -First Republic Bank has received $30 billion in deposits from several big banks, the banks said in a statement on Thursday, as part of a rescue package for the lender.
JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp, Wells Fargo & Co, Goldman Sachs Group Inc, Morgan Stanley and others are involved in the rescue, according to the statement.
First Republic’s shares were last up nearly 6% at $32.92 in volatile trading on Thursday. The stock tumbled 36% earlier in the day before reports of the rescue plan sent them up as much as 40%.
The shares have lost two-thirds of their value in the past seven days and are down more than 65% month-to-date.
A round of financing on Sunday raised through JPMorgan Chase & Co, gave First Republic access to a total of $70 billion in funds, but failed to calm investors as worries of a contagion deepened in the wake of two large-scale collapses in the banking industry.
The rescue effort was initiated by banks but had strong backing and encouragement from the government, according to a person with knowledge of the matter.
Founded in 1985, First Republic had $212 billion in assets and $176.4 billion in deposits as of the end of last year, according to its annual report.
About 70% of its deposits are uninsured, above the median of 55% for medium-sized banks and the third highest in the group after Silicon Valley Bank and Signature Bank, according to a Bank of America note.
Earlier on Thursday, Reuters reported PacWest Corp is also in talks about a liquidity boost with investment firm Atlas SP Partners.
Bloomberg News reported earlier on the rescue package and its participants.
(Reporting by Shreyashi Sanyal, Lisa Pauline Mattackal, Niket Nishant and Mehnaz Yasmin in Bengaluru and Nupur Anand in New York and Pete Schroeder and Chris Prentice in Washington; Editing by Anil D’Silva and Shounak Dasgupta)
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Sun, Mar 19, 2023