First Republic Bank buyout: JPMorgan, PNC Financial eyeing takeover after FDIC 'receivership'
If the takeover deal is finalised, First Republic Bank will be the third bank to have collapsed in the US after Silicon Valley Bank and Signature Bank in the last two months.
- Apr 29, 2023,
- Updated Apr 29, 2023 11:05 AM IST
JPMorgan Chase & Co. and PNC Financial Services Group are likely to bid to take over San Francisco-based First Republic Bank after the troubled lender was put under the receivership of the US Federal Deposit Insurance Corporation (FDIC), the Wall Street Journal reported.
The seizure and sale of San Francisco-based First Republic could happen over this weekend, the report added. If the takeover deal is finalised, First Republic Bank will be the third bank to have collapsed in the US after Silicon Valley Bank and Signature Bank in the last two months.
On Friday, First Republic’s stocks plunged 54 per cent and the trading was halted multiple times for volatility amid reports that FDIC is looking into its rescue. At the end of the day, the bank's stock closed 43 per cent lower and hit a record low of $2.99 apiece.
Earlier this week, shares of First Republic tumbled nearly 50 per cent after the mid-size bank said customers had pulled more than $100 billion from their accounts amid last month's banking panic. The bank's shares have lost 97 per cent of their value so far this year.
As per the report, banks were earlier reluctant to invest money to rescue the troubled lender, but now have shown interest to buy it out if it is auctioned.
A group of 11 banks had deposited $30 billion into the First Republic in March to help it buy time to find a solution. These included JPMorgan Chase & Co, Citigroup, Bank of America, Wells Fargo, Goldman Sachs and Morgan Stanley.
Earlier on Friday, a Reuters report said that the government is brokering a rescue deal for the First Republic, which pushed its shares up as much as 6.6 per cent earlier in the session.
A CNBC report said the FDIC, the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank.
Also read: ITC narrows gap with HUL in m-cap race; can it pip the soap maker?
JPMorgan Chase & Co. and PNC Financial Services Group are likely to bid to take over San Francisco-based First Republic Bank after the troubled lender was put under the receivership of the US Federal Deposit Insurance Corporation (FDIC), the Wall Street Journal reported.
The seizure and sale of San Francisco-based First Republic could happen over this weekend, the report added. If the takeover deal is finalised, First Republic Bank will be the third bank to have collapsed in the US after Silicon Valley Bank and Signature Bank in the last two months.
On Friday, First Republic’s stocks plunged 54 per cent and the trading was halted multiple times for volatility amid reports that FDIC is looking into its rescue. At the end of the day, the bank's stock closed 43 per cent lower and hit a record low of $2.99 apiece.
Earlier this week, shares of First Republic tumbled nearly 50 per cent after the mid-size bank said customers had pulled more than $100 billion from their accounts amid last month's banking panic. The bank's shares have lost 97 per cent of their value so far this year.
As per the report, banks were earlier reluctant to invest money to rescue the troubled lender, but now have shown interest to buy it out if it is auctioned.
A group of 11 banks had deposited $30 billion into the First Republic in March to help it buy time to find a solution. These included JPMorgan Chase & Co, Citigroup, Bank of America, Wells Fargo, Goldman Sachs and Morgan Stanley.
Earlier on Friday, a Reuters report said that the government is brokering a rescue deal for the First Republic, which pushed its shares up as much as 6.6 per cent earlier in the session.
A CNBC report said the FDIC, the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank.
Also read: ITC narrows gap with HUL in m-cap race; can it pip the soap maker?