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- A group of Wall Street banks led by JPMorgan, Bank of America, and Citigroup are set to deposit $30 billion into embattled First Republic Bank.
- Also providing support are Wells Fargo, Morgan Stanley, US Bancorp, Truist Financial, and PNC Financial Services.
- First Republic shares rallied more than 10% on the news after collapsing in recent days.
A group of banks led by JPMorgan, Bank of America, and Citigroup is set to deposit $30 billion into embattled First Republic Bank, according to reports from Bloomberg and The Wall Street Journal.
The trio will contribute $5 billion apiece, according to the reports. Other firms reportedly involved include Wells Fargo, Morgan Stanley, US Bancorp, Truist Financial, and PNC Financial Services.
The move comes after fears of depositors pulling funds from the lender ignited a steep sell-off in the bank’s stock following Silicon Valley Bank’s implosion.
Shares of First Republic swung sharply higher in Thursday afternoon trade following the reports.
Shares of First Republic had plunged 30% early Thursday after Bloomberg reported late Wednesday that the company was considering strategic options to bolster liquidity, including a sale to bigger banks. The bank’s credit had earlier been downgraded to junk by ratings agencies S&P and Fitch.
First Republic on Sunday said its liquidity position remained “very strong,” and in a regulatory filing, said it had received $70 billion of liquidity from the Federal Reserve and JPMorgan Chase.
First Republic shares have plunged about 80% year to date. Fierce selling erupted last week as investors scoped out lenders with a hefty amount of deposits that would be uninsured by the FDIC. Silicon Valley Bank was seized after clients pulled funds after learning a jump in interest rates spurred billions in losses in SVB’s bond holdings.
First Republic had 68% of its deposits unprotected by the FDIC’s insurance limit of $250,000 per account, according to the bank’s latest 10-K filing. Silicon Valley Bank had about 94% of its total domestic deposits uninsured, according to S&P Global Market Intelligence data.
