[ad_1] A bank that was saved from failing in the wake of the collapse of Silicon Valley Bank in March, is once again fighting for survival after it
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A bank that was saved from failing in the wake of the collapse of Silicon Valley Bank in March, is once again fighting for survival after it revealed $150 billion was withdrawn from it.
Shares in First Republic Bank dropped to all-time low on Wednesday in the US as the San Francisco-based bank said it was seeking a lifeline after becoming engulfed in the banking crisis that hit regional lenders earlier this year.
First Republic’s market value fell below $US1 billion ($A1.5bn) for the first time ever, plummeting to around $886 million ($1.3bn) amid doubts that the troubled lender can be saved, reported Fox News.
On Monday, First Republic had said its situation was dire.
“There can be no certainty that the bank will be able to take actions to strengthen our business within a time frame that is acceptable to the market or our regulators,” the bank said in a statement.
“There can be no certainty as to the future of the bank if we are not able to do so.”
Wednesday’s sell-off – which triggered halts in trading multiple times – follows a free fall that began on Monday after the closing bell following the bank’s revelation that its deposits dropped 40 per cent in the first quarter as panicked customers pulled their funds amid fears of a growing crisis when Silicon Valley Bank (SVB) was seized by regulators last month.
First Republic reported that its deposits totalled $US104.5 billion ($A159bn) at the end of March – down 35.5 per cent year over year and a drop of 40.8 per cent compared to December 31, 2022.
That figure includes the infusion of $US30 billion ($A46bn) in uninsured deposits from 11 of the largest US banks that were provided to stabilise the bank amid the crisis in March.
In total around $US100bn ($A151bn) was withdrawn from First Republic that month.
The Federal Deposit Insurance Corporation, which aims to provide stability to the US banking market, swooped in to take control of SVB amid its run on the bank, but regulators were reportedly reluctant to take the same actions to seize First Republic on Wednesday.
Citing sources, broadcaster CNBC reported that the US government is currently unwillingly to step in and begin rescuing First Republic.
Meanwhile, a source told Reuters the bank is looking at its options, including selling assets.
This story appeared on Fox News and is reproduced with permission.
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