First Republic shares gain on hopes of rescue deal

1 month ago 50

FILE PHOTO: A trader works at the post where First Republic Bank stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 16, 2023. REUTERS/Brendan McDermid

(Reuters) - Shares of First Republic gained 11% in premarket trading on Friday after a report that U.S. officials are coordinating urgent talks to rescue the regional lender as private-sector efforts led by the bank’s advisers have yet to reach a deal.

The government’s involvement is helping bring more parties, including banks and private equity firms, to the negotiating table, one of the sources told Reuters.

Wall Street banks have been trying to find a solution for the beleaguered lender following last month’s collapse of two regional lenders that prompted some of the biggest U.S. banks to deposit $30 billion at First Republic.

“The potential worst-case scenario stemming from the collapse of Silicon Valley Bank appears to have been averted,” said Mark Haefele, chief investment officer at UBS Global Wealth Management in a note.

“But the problems at First Republic are a reminder that further problems remain possible.”

First Republic shares hit a record low this week after it said deposits slumped by more than $100 billion in the first quarter.

The San Francisco-based lender’s stock has more than halved so far this week. Since the start of the year, it has lost nearly 95% of its value, making it the worst performing S&P 500 stock.

Meanwhile, the Federal Reserve is set to publish an internal review of its supervision of Silicon Valley Bank on Friday, April 28 at 11 a.m. ET (1500 GMT).

Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty


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