United States: after a plunge in the stock market, the fate of the First Republic bank in suspense
Television in a First Republic office at a bank office in Manhattan on Thursday, March 16. AP - Mary Altaffer
Text by: RFI Follow
The stock of the bank First Republic plunged again on Wall Street on Monday. The massive monetary support provided by a group of major US banks was not enough to reassure investors. The title plunged 47.11% on the New York Stock Exchange on Monday, March 20.
First Republic is still under pressure on the New York Stock Exchange. The Californian regional bank is affected on Monday by the downgrading of its rating Sunday by the financial rating agency Standard & Poor's (S&P).
However, the bank says it can insure its customers' withdrawals thanks to its own reserves and the $30 billion bailout package financed by 11 major US banks. The US Minister of Economy also intervened. Janet Yellen was reassuring Sunday about the strength of the US banking system in terms of capitalization and liquidity.
Raising new capital
But another element did not appease investors: the New York Times claimed that First Republic was trying to raise new capital from other financial institutions. The option of its sale is also on the table, according to the daily.
This tends to show that his problem is still not solved. The future of the bank is therefore uncertain. Investors' eyes are now on the Fed. The US Federal Reserve is expected to decide on Wednesday whether or not to raise its key interest rate.
First Republic, which was founded in 1985, is based in San Francisco. Its agencies are primarily located in California and urban areas on the East Coast. At the end of 2022, it was the fourteenth largest U.S. bank by asset size.
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