(New York) U.S. bank First Republic collapsed on Wall Street on Tuesday as investors worried about the company’s future as customers withdrew more than $100 billion in deposits in the first quarter.
The action ended Tuesday down 49% on the New York Stock Exchange after being suspended several times during the session, in the wake of the publication of its financial results Monday evening.
It is down more than 90% compared to the start of the year.
The bank found itself in the spotlight in mid-March, when the authorities and other financial institutions came to its rescue to prevent it from experiencing the same fate as Silicon Valley Bank and Signature Bank, namely the bankruptcy.
First Republic assured that withdrawals from its customers had stabilized since the end of March, that it planned to cut its expenses by laying off up to a quarter of its workforce and that it was going to limit the sums it lends.
But the management did not give many details, deciding not to answer questions from analysts as is usually the case on the occasion of the publication of quarterly results.
Its managing director simply indicated that in addition to measures intended to strengthen its financial health, the bank was studying “strategic options”.
According to FinancialTimeswhich relies on sources familiar with the situation, White House, central bank and Treasury officials are talking to First Republic.
The bank would like the government to “bring together the relevant parties to find a solution,” a source close to the establishment told the economic daily.
“We don’t see an easy way out for the bank and we still believe there is a significant likelihood that there will be little left for shareholders once the situation clears up,” a note said. Eric Compton of Morningstar.
In the current situation, with the balance sheet as it is, “we do not believe that First Republic will be profitable in the future”, he says.