First Republic, founded in 1985 and headquartered in San Francisco, is the fourth largest US bank by assets. (photo: 123RF)
NEW YORK – Shares of the US First Republic Bank fell on Wall Street on Thursday after news reports that the bank is considering various options for its future, including a possible sale.
The title is down 32% on the first NYSE exchanges after already losing 21% the day before and 73% since last Wednesday.
And that’s even as other US bank stocks were in the green on Thursday following efforts by the Swiss Central Bank to restore investor confidence in Credit Suisse.
First Republic, founded in 1985 and headquartered in San Francisco, is the fourth largest US bank in terms of assets, with assets of $212 billion at the end of 2022.
It has offices mainly in California, but also on the East Coast (New York, Massachusetts, Connecticut, Florida), in the states of Oregon, Washington and Wyoming. Provides private banking services to individuals, companies and wealth management.
Because of its client profile, the bank is one institution that investors are especially watching after the close failures of Silicon Valley Bank, Signature Bank, and Silvergate.
According to the global rating agency S&P, 68% of the deposits stored in the bank are in accounts exceeding 250 thousand US dollars, that is, the limit usually guaranteed by the authorities.
Some fear that many customers would prefer to put their money in banks that do not present an initial risk of default.
Ratings agencies S&P Global Ratings and Fitch on Wednesday downgraded the company’s debt rating to the speculative investment category.
“We believe that the risk of deposit flight is high at First Republic Bank despite the actions taken by banking regulators and the fact that the bank is actively increasing its borrowing capacity to mitigate risks associated with the bank failures of the past week,” S&P justifies in a note.
According to Bloomberg, which cites sources familiar with the matter, the bank is currently exploring “strategic options.” It could be a sale or a way to enhance liquidity.
On Sunday, the bank said it had “enhanced and diversified liquidity liquidity” thanks to facilities provided by the US central bank and JPMorgan Chase.
“Food trailblazer. Passionate troublemaker. Coffee fanatic. General analyst. Certified creator. Lifelong music expert. Alcohol specialist.”