Falling shares of another bank in America
According to Iran Economist and quoted by Economic, the shares of this bank fell by more than 50% because concerns about the possible problems caused by the collapse of Silicon Valley Bank (SVB) and Signature have increased.
The KBW Bank regional banking index fell 5.4 percent and the S&P 500 banking index fell 6 percent.
The CEO of this bank said: “The capital and liquidity position of this bank is very strong and its capital is much higher than the regulatory threshold for banks with good capital.”
However, investors continue to voice their concerns and take the selling route.
“The real issue for the banking industry is that there’s a crisis of confidence in deposits, and when that goes away, things can go very quickly,” said Christopher McGrath, head of US bank research at KBW Investment Bank.
US President Joe Biden has vowed to do whatever it takes to deal with a potential banking crisis after the collapse of Silicon Valley Bank and Signature. For this reason, national regulators took emergency measures on Sunday to maintain confidence in the banking system.
On Sunday, JP Morgan and the US Federal Reserve moved for additional financing, giving access to a total of $70 billion in funds through various sources.
Despite the cash injection, U.S. financial services and banking firm Raymond James cut the bank’s stock by half, highlighting the risk of deposit outflows First Republic faces from panicked large depositors after the bank collapsed in Silicon Valley. .
Founded in 1985, First Republic had $212 billion in assets and $176.4 billion in deposits by the end of last year, according to its annual report.
According to the Bank of America note, about 70% of the bank’s deposits are not insured, which is higher than the average of 55% for medium-sized banks and the third highest rate in the group after Silicon Valley Bank and Signature Bank.
Traders and analysts indicated that the panic could prompt people to move their funds from smaller lenders to larger, more secure banks.
Among Wall Street lenders, Bank of America ( BAC.N ) fell 3.3 percent, Citigroup ( CN ) and Wells Fargo ( WFC.N ) each fell about six percent; While shares of lenders in Asia and Europe also fell.
At 5:08 a.m. ET, shares of First Republic Bank fell 50.87 percent to trade at $40.17.