First Republic Bank to receive billions of dollars from large banks – sources
2023.03.16 15:10
© Reuters. A First Republic Bank branch is pictured in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. REUTERS/Mike Segar
(Reuters) -Several large banks are in talks to deposit billions of dollars at First Republic Bank (NYSE:) to salvage the embattled lender, according to people familiar with the matter.
The banks are set to deposit $29 billion, one of the sources said.
This follows a round of financing on Sunday raised through JPMorgan Chase & Co (NYSE:), which gave First Republic access to a total of $70 billion in funds, but failed to calm investors as worries of a contagion deepened in the wake of two large-scale collapses in the banking industry.
Besides JPMorgan Chase & Co, Citigroup Inc (NYSE:), Bank of America Corp (NYSE:) and Wells Fargo (NYSE:) & Co are part of the rescue, two of the sources said.
PNC Financial (NYSE:) Services, Goldman Sachs Group Inc (NYSE:), Morgan Stanley (NYSE:), Truist Financial (NYSE:) and US Bancorp (NYSE:) are also involved, both the sources added.
The effort was initiated by banks but had strong backing and encouragement from the government, according to a person with knowledge of the matter.
Eleven banks were involved and the rescue plan is supported by U.S. regulators, the person said.
Founded in 1985, First Republic had $212 billion in assets and $176.4 billion in deposits as of the end of last year, according to its annual report.
About 70% of its deposits are uninsured, above the median of 55% for medium-sized banks and the third highest in the group after Silicon Valley Bank and Signature Bank (NASDAQ:), according to a Bank of America note.
Earlier on Thursday, Reuters reported PacWest Corp is also in talks about a liquidity boost with investment firm Atlas (NYSE:) SP Partners.
Banks including JPMorgan and Morgan Stanley are in talks with First Republic for a potential deal that could bolster its finances, several media reports said on Thursday.
The banks are set to deposit $30 billion with First Republic in a concerted effort by the U.S. government to rescue the struggling lender, Bloomberg News reported on Thursday, citing people with knowledge of the matter.
