Salem Radio Network News Tuesday, March 21, 2023

Business

First Republic Bank to receive billions of dollars from large banks – sources

(Reuters) -Several large banks are in talks to deposit billions of dollars at First Republic Bank to salvage the embattled lender, according to people familiar with the matter.

The banks are set to deposit $29 billion, one of the sources said.

This follows a round of financing on Sunday raised through JPMorgan Chase & Co, which 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.

Besides JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Wells Fargo & Co are part of the rescue, two of the sources said.

PNC Financial Services, Goldman Sachs Group Inc, Morgan Stanley, Truist Financial and US Bancorp are also involved, both the sources added.

The effort was initiated by banks but had strong backing and encouragement from the government, according to a person with knowledge of the matter.

Eleven banks were involved and the rescue plan is supported by U.S. regulators, the person said.

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.

Banks including JPMorgan and Morgan Stanley are in talks with First Republic for a potential deal that could bolster its finances, several media reports said on Thursday.

The banks are set to deposit $30 billion with First Republic in a concerted effort by the U.S. government to rescue the struggling lender, Bloomberg News reported on Thursday, citing people with knowledge of the matter.

(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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