The US government has asked several financial institutions to make a takeover bid for the ailing First Republic Bank this weekend, a source told AFP news agency. Four parties may be interested.
Earlier this year, there was a lot of unrest around medium-sized banks in the United States. Silicon Valley Bank and Signature Bank collapsed in quick succession after customers withdrew large amounts of money from their accounts in a matter of days. The regional bank from San Francisco First Republic is struggling with the same problem, because the balances with the bank fell by more than 40 percent in the past quarter.
As long as there is no well-defined rescue plan for the bank, the share price will continue to plummet. Shares of First Republic fell 48 percent last Friday, trading below $4. The stock has already lost more than 95 percent of its value this year.
In March, the bank already received support from eleven major banks, who collectively transferred USD 30 billion to the bank to improve liquidity. In vain: last week, First Republic’s share lost approximately 75 percent of its market value.
The American regulator FDIC is now hurriedly trying to find buyers, reports a well-informed source. Of the six financial institutions that were approached, four would be interested in a takeover. An option that is on the table, according to American media, is that the FDIC will initially take control of the bank itself, after which the assets would be sold to another private financial institution.
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