Arab Press

بالشعب و للشعب
Sunday, Sep 08, 2024

First Republic Bank's shares plunge as it reveals more than $100bn of withdrawals

First Republic Bank's shares plunge as it reveals more than $100bn of withdrawals

Financial market analysts question again whether the US lender might by the third bank to collapse this year as it reveals the extent of the damage inflicted by the crisis of confidence last month.
Shares in First Republic Bank have tumbled to a new record low after the troubled US regional lender admitted last month's banking crisis sparked a customer deposit flight of more than $100bn.

The bank, which was saved from possible collapse by a $30bn cash injection agreed by major lenders, saw its stock drop by up to 29% at the market open on Tuesday.

They closed almost 50% lower, leaving its market value 93% lower in the year to date below $3bn.

It followed the release of its first quarter earnings report that revealed the extent of the challenge it faced to recover the business.

First Republic said the withdrawals, which amounted to more than half its pre-crisis deposit total, had cooled since the rescue cash was announced.

But financial market analysts said the amount had revived fears that First Republic could become the third US bank to fail after the collapse of Silicon Valley Bank and Signature Bank.

The crisis of confidence also saw Switzerland's Credit Suisse, which endured a £55bn deposit outflow, forced to merge with rival UBS.

The saga was largely born out of concerns that rising interest rates imposed by central banks to tackle inflation had damaged their balance sheets.

San Francisco-based First Republic said it would move to shrink its balance sheet.

Bloomberg News reported that the bank was exploring asset sales of up to $100bn.

Executive pay cuts, First Republic said, would be followed by thousands of job losses to be completed by the end of June.

The bank said it expected to axe between 20%-25% of its workforce, which was reported at 7,200 at the end of last year.

Its results statement did little to support shares of other US regional lenders, with some seeing shares down by more than 5%.

The jitters forced all the major Wall Street indices lower, with the S&P 500 down more than 1.5% as wider recession fears resurfaced.

Analysts said the mid-tier banking sector, but especially First Republic, had to assure customers that their deposits remained safe and investors that they had the liquidity to operate effectively.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "It seems the lifeline thrown to First Republic by large lenders hasn't stopped confidence sinking.

"With almost a quarter of the workforce being axed and a quick-fire asset sale getting underway, investors are sensing panic and fleeing the stock and worries are rising about another banking collapse."
Comments

Oh Ya 1 year ago
But but but slow joe and the ho have everything is GREAT . Are you prepared for a financial setback like the great depression if 28-32 .

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Global News Roundup: Iraq's Alleged Espionage Debunked, Syrian Singer Shines, Ivory Coast Collision Tragedy, U.S. College Protests, Russian Shelling Incident, and Yemen Drone Downing
Pakistani Citizen Arrested for Plotting Terror Attack on Jews in NYC
Gaza War Marks Its 12th Month
Israeli Attack Kills Three Emergency Workers in Lebanon
Escalating Hezbollah-Israel Conflict: Global Leaders Speak Out Amid Tragedies and Humanitarian Crises
Kamala Harris and Trump Gear Up for Pivotal Debate as Global Conflicts Escalate
Protests in France Over New Prime Minister, Tragic Events in Mormant, and Global Developments
Global Turmoil: Zelensky Seeks Military Aid, Mexico Re-arrests Cartel Leader, and Kenya School Fire Tragedy
إيطاليا تحقق فوزاً تاريخياً على فرنسا وتتغلب عليها 3-1 في دوري الأمم الأوروبية
Global Turmoil: Rocket Attacks Close Manipur Schools, North-South Korean Tensions, and Typhoon Yagi's Devastation
Tim Walz Supports Palestinian Rights Amid Conflict, As Global Leaders Push for Ceasefire and Diplomatic Resolutions
International Turmoil and Diplomatic Maneuvers: Jordan Condemns Tragic Killing, US-Iran Tensions Escalate, and Biden Hosts Starmer for Critical Talks
Global Turmoil: UK's Crackdown on Smugglers, Zelensky's Plea for Arms, and New Leadership in Thailand
Displaced Gazans Face Dire Conditions Amid Israel-Hamas Conflict; Global Climate Crisis Intensifies
Former Philippines Mayor Faces Money Laundering Charges; China Ends International Adoptions; Shanghai Unveils World's Largest Indoor Ski Resort
Global Turmoil: UN Calls for Action in Sudan, Climate Challenges for Iraqi Farmers, and Global Leaders Seek Unity Amid Rising Conflicts
Super Typhoon Yagi Ravages Southern China: Major Disruptions Amid Asia's Strongest Storm of the Year
Rising School Security Debate, Global Defense Moves, and Political Intrigues Mark Headlines
US Charges Russian GRU Officers for Cyberattacks, Blinken Tackles Haiti Crisis, and Global Turmoil Unfolds from Middle East to Africa
Escalating Tensions: Israeli Airstrikes in Lebanon, Tragic Gaza Deaths, and Ceasefire Struggles Amid Arab League Criticism
Zelensky's Cabinet Overhaul, EU's Serbia Ultimatum, Gaza's Polio Drive, Tunisian Election Concerns, Bazzi Pleads Guilty, and NATO Praises Ukraine's Historic Kursk Offensive
ICC Chief Prosecutor's Arrest Warrants on Israeli and Hamas Leaders Highlight Justice; UK Suspends Arms Export Licenses to Israel Amid War Crimes Concerns; Humanitarian Efforts Shine in Gaza; US Vows Continued Syria Engagement; Tragedy in English Channel; Michel Barnier Named French Prime Minister
Happy 26th Birthday, Google!
US Charges Hamas Leaders With Terrorism Over October 7 Attack on Israel
UK Suspends 30 Arms Export Licenses to Israel: Details and Implications
Hossein Shamkhani: The Rise of an Oil Tycoon
Biden Criticizes Netanyahu Over Hostage Crisis
Macklemore Cancels Dubai Show Over UAE’s Role in Sudan Conflict
Israeli Union Announces Nationwide Strike After Hostages Found Dead
Iranian President's Helicopter Crash Attributed to Bad Weather
AI Revolutionizes Military Tactics in Israel's Conflict with Gaza
Israeli Hostage Rescued in Complex Gaza Operation
Heist of the Century: $2.5 Billion Stolen in Iraq
Singles in Pakistan Embrace Modern Matchmaking
Gen-Z Globe-Trotter Calls Egypt 'Most Annoying'
Hamas and Islamic Jihad Claim Responsibility for Tel Aviv Bomb Blast
Extensive Forest Fires Force Evacuations in Izmir, Turkey
Starmer Calls on Iran to Refrain from Attacking Israel
US Approves $20 Billion Arms Package for Israel Amid Gaza Conflict
Israel Expands Evacuations in Gaza Amid Continued Strikes
Israeli Intelligence Warns of Imminent Iranian Attack
Iranian Nobel Winner Narges Mohammadi Hurt in Prison Clash
Iraq Proposes to Lower Marriage Age for Girls to Nine
Gazans Concerned Over Hamas’s New Chief Yahya Sinwar
Israel Vows to 'Eliminate' New Hamas Chief Yahya Sinwar
Yahya Sinwar Named Hamas Chief After Ismail Haniyeh Killing
Diplomatic Efforts Intensify Amid Rising Mideast Tensions between Israel and Iran
Nine UNRWA Employees Terminated Over Alleged Involvement in Hamas Attack
Hamas Regrets October 7 Attack on Israel
Biden's Heated Call with Netanyahu Amid Middle East Tensions
×