First Republic Bank’s share price fell by 50% after quarterly results

📌 After the collapse of Silicon Valley Bank and Signature Bank in March, it is now First Republic Bank that is facing major difficulties. In fact, on Monday, First Republic Bank’s quarterly reports were released, revealing a dramatic slump in deposits. The San Francisco-headquartered bank reported a more than $100bn plunge.

📌 These results raised fears that it could be the third bank to fail after its two competitors. The consequences were not long in coming. Indeed, on Tuesday, a day after the mid-sized US bank announced a dramatic slump in deposits, First Republic Bank’s shares closed down 50%.

📌 First Republic Bank is now faced with several options to try to recover. According to a source familiar with the situation, options can include an asset sale of up to $100bn or the creation of a “bad bank” which is a crisis-type method of isolating financial assets that have problems. First Republic Bank said on Monday it plans to shrink its balance sheet and slash expenses by cutting executive compensation, paring back-office space, and laying off 20% to 25% of employees in the second quarter.

Source: The Guardian