A group of US financial institutions are “in talks” to rescue First Republic Bank with up to 30,000 million and they could announce the measure this Thursday, according to various specialized media.
JPMorgan y Bank of Americathe two largest banks in the US, will deposit 5 billion dollars each in First Republic, according to The New York Times (NYT). The same amount would put Citigroup, according to The Wall Street Journal. For their part, Goldman Sachs and Morgan Stanley are expected to contribute $2.5 billion each if the deal is completed, and a smaller group of regional banks could contribute $1 billion each as part of the total, the NYT reported. .
Following this media leak, First Republic shares were up 5.31% at 3:00 p.m. local time (7:00 p.m. GMT), a stark contrast to the drop of almost 30% at first hour of the morning.
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First Republic had the third highest rate of uninsured deposits among US banks, behind Silicon Valley Bank (SVB) and Signature Bank, according to a note by Raymond James.
First Republic, which is based in San Francisco, was demoted to the category of ‘junk’ (garbage, in English) on Wednesday by both Fitch Ratings and S&P Global. With this movement, First Republic is prevented from following the path of Silicon Valley Bank and Signature Bank, entities closed by the authorities on the 10th and 12th, respectively, in a movement that unleashed a current of panic that later spread to Europe.