It collapses back to Wall Street the title of First Republic Bank, yet another American bank to enter the eye of the storm within a few days after the crises of Silicon Valley Bank, Signature Bank and Silvergate.
First Republic -23% after bailout and halt to dividend
On the US Stock Exchange, the shares of the 14th largest US banking group by assets drop more than 23% of their value to 26,35 dollars following the bailout carried out by the major US banks which decided to intervene by supporting the Californian institute with $30 billion in aid. The stock had already lost 21% on March 15 and 73% since March 8. In the session of March 16, after the announcement of the rescue by the US banking giants, the stock had gained more than 10%.
In detail, 11 banks will save First Republic: JP Morgan Chase, Bank of America, Citigroup and Wells Fargo will each deposit 5 billions of dollars. Goldman Sachs and Morgan Stanley will invest instead 2,5 billion dollars each while BNY Mellon, PNC Bank, State Street, Trust and US Bank will deposit $1 billion each. “The shares of America's largest banks reflect theirs confidence in the country's banking system. Together, we are deploying our financial strength and liquidity across the broader system where it is needed most,” the banks said in a statement on Thursday.
A few hours later, however, a new announcement came from First Republic Bank which communicated the suspension of the dividend “during this time of uncertainty”. The bank also said it will look to reduce its lending, but also the size and composition of its overall operations.
According to the Financial Times, analysts continue to question whether these moves will restore investor confidence in First Republic, as well as the health of other US regional lenders.
The banks that helped First Republic are also in the red
The titles of the eleven banks that have decided to inject 30 billion dollars of liquidity into the First Republic Bank are all in deep red. Jp Morgan Chase, one of the four 'big banks' that each contributed $5 billion, 3,3%; Citigroup loses 3,1%, Bank of America e Wells Fargo the percent. It's still: Goldman Sachs -3,1% Morgan Stanley -2,4 ,. Bank of New York Mellon -3,76% State Street -4,3% Trust -4,7% U.S. Bancorp -3% PNC Financial Services -5,6%.
