US lender First Republic hits new low as fears mount
US lender First Republic hits a new low amid reports that the US government will not come to rescue the bank
Shares in US regional lender First Republic crashed to new lows last night amid reports the US government is currently unwilling to bail out the bank.
In another brutal sell-off, the stock plummeted as much as 40 percent, taking the bank below $1bn (£800m) for the first time.
It was worth more than $40bn (£32.1bn) in November 2021.
Last night’s fall came after a nearly 50 percent drop in the previous session, bringing the loss for the year to 95 percent.
The latest defeat came when cable industry news outlet CNBC reported that US government officials are not hatching a rescue mission for the San Francisco-based lender, even after nervous customers pulled $100bn (£80.3bn) in deposits in the first quarter of 2023.
In another brutal sell-off, First Republic shares plunged as much as 40%, taking the bank below $1bn (£800m) for the first time
Most outflows occurred in the three weeks following the collapse of the Silicon Valley Bank (SVB) on March 10, which led to an “unprecedented outflow of deposits.”
The crisis prompted a group of America’s largest banks, including JP Morgan and Citigroup, to pump £25bn into First Republic last month in a desperate bid to stay afloat.
But with the stock price falling again, First Republic and its advisers are now looking for ways to save the bank.
After hitting its early lows, the stock still closed 32.7 percent. Concerns about a broader banking crisis eased, however, as rival US regional lenders saw their shares rise.
PacWest Bancorp was up 7.7 percent, while Fifth Third Bancorp was up 0.9 percent. Zion Bancorp, however, fell 1.05 percent.
“I would suggest that the fact that PacWest Bancorp is on the rise indicates that even if First Republic goes under, any contagion will likely remain under control,” said Michael Hewson, an analyst at CMC Markets.
Fears of a global banking crisis erupted last month when the collapse of three US lenders – SVB, Signature and Silvergate – sparked panic in financial markets around the world.
In Europe, the crisis has engulfed Credit Suisse, forcing the once-successful Swiss banking giant into the hands of its arch-rival UBS in a humiliating bailout orchestrated by the country’s government and regulators.
Victoria Scholar, head of investment at Interactive Investors, said: “Concerns about the health of the banking sector have resurfaced after First Republic’s plunge after it reported $100 billion in withdrawals, sparking fears of another bank failure in the United States. States.’