Skip to main content

In Response To Falling Share Prices, First Republic Engages Lazard To Investigate Options

American regional banks have been among those most severely impacted by the effects of Silicon Valley Bank's demise.

After First Republic's shares dropped in the wake of Silicon Valley Bank's closure, the lender contacted investment bank Lazard to assist it in examining strategic options.

According to persons familiar with the situation, Lazard has joined JPMorgan Chase in counseling First Republic on alternative options such as a potential sale, capital injection, or selling part of its assets. According to the persons, California-based First Republic has also recruited McKinsey to provide the bank with strategic planning advice.

One person with knowledge of the situation claimed that First Republic management has been opposed to the concept of a sale in the weeks since SVB's demise.

Lazard, McKinsey, and First Republic all declined to comment. The Wall Street Journal first broke the news of the hiring of Lazard and McKinsey.

When US Treasury secretary Janet Yellen hinted that a government backing for depositors at smaller banks would be available if necessary, First Republic shares rose early on Tuesday. However, in after-hours trading, the share price of the bank fell by roughly 13%.

With the collapse of SVB, the bank has been the most severely impacted among the regional banks, with its share price down more than 80% this month. The $30 billion deposit made last week by 11 of the biggest US banks with First Republic failed to significantly support the bank's share price.

Concern has been focused on the significant number of First Republic customers — roughly two-thirds by the end of 2022 — whose money with the bank surpass the $250,000 threshold on government protection for deposits, as well as the size of the bank's long-term investments and mortgages.

Due to the Federal Reserve rising interest rates last year, many of those investments and mortgages are now worth less than when First Republic purchased or generated them.

Last week, First Republic said that it was lowering its borrowings and assessing the make-up and size of its balance sheet.

According to previous Financial Times reports, First Republic has lost nearly $70 billion in deposits since the year began, when they were worth a total of $176.4 billion.

Comments

  1. In Response To Falling Share Prices, First Republic Engages Lazard To Investigate Options

    ReplyDelete

Post a Comment

Popular posts from this blog

Design Without Limits: Discover the Best Canva Alternatives

Canva is a powerful online design tool that makes it easy for anyone to create professional-looking graphics, even without prior design experience. With its intuitive drag-and-drop interface and extensive library of templates, images, and design elements, Canva empowers users to bring their creative vision to life.

How Important Digital Marketing Is To The Modern Businesses Of 2023

How Frequently Do You Search On Google Past The First Or Second Page? Almost Never. And most people are just like you. They don't go to the second page most of the time.

Why Using Twitter in Your Business's Marketing Strategy Is Crucial

How Companies Are Using Twitter In Innovative Strategies For Marketing Their Brands

The Benefits of Hiring Sitios Web Panamá: Taking Your Digital Marketing to the Next Level

In this article, we discuss the advantages of working with a top-notch digital marketing agency like Sitios Web Panamá. Discover how they can help you achieve your business goals and grow your online presence.

Strategies of Creative Thinking for Entrepreneurs

Brainstorming is a fantastic approach to produce ideas, whether you're trying to come up with a great home business idea or you're seeking for fresh ideas

Mastering the Art of LinkedIn: Proven Strategies to Grow Your Following

In today's business environment, having an online presence is essential, and your LinkedIn Profile functions as a virtual business card. LinkedIn has developed into a potent tool for both individuals and organizations. It's a technique to cultivate connections and create networks that go beyond merely closing deals; it's not just a list of contacts.

Unlocking Startup Growth: 4 Strategic Tips for Leveraging TikTok's Viral Potential

TikTok has undeniably become more than the innovative platform that companies discarded in early 2020 and even 2021. But its strategic usefulness for expanding startups is frequently ignored.

Strategies for Small Business Success During Unpredictable Times

Entrepreneurs should be cautiously concerned and thoughtfully prepared when there is talk of a recession. A faltering economy can create a business climate that results in lower sales, problems with cash flow, and a threat to

The Importance of Asking the Right Questions

The correct questions must be asked in order to solve problems. The types of information we receive are determined by the questions we pose, and the caliber of the information we possess will have an impact on the caliber of our solutions.