Banking crisis concerns rise again after First Republic Bank balance sheet
After the balance sheets of the First Republic Bank, the fear that the banking crisis in the US could affect prices was once again on the agenda. In the market where the voices of the banking crisis were once again heard, the increase in uncertainties regarding monetary policy also increased the perception of risk.
First Republic deposits fell sharply in the first quarter, despite a total of $30 billion in deposit support from Wall Street’s biggest banks last month. As of the end of March, the bank’s deposits fell 35.5 percent on an annual basis to $104.5 billion.
First Republic’s deposits were down 40.8 percent compared to the end of last year. The bank’s deposits were $162.1 billion as of March 31, 2022 and $176.4 billion as of December 31, 2022.
The bank said it would cut a quarter of its workforce, trim outstanding loan balances and halt other non-essential activities. The bank also retracted all of its previous forecasts.
FALLING SHARES
While the bank’s shares, which published its balance sheet after the markets closed on Monday, lost almost 50 percent of their value, the New York Stock Exchange temporarily halted trading in the bank’s shares due to excessive volatility.
US Stocks ended the day with losses as the announced balance sheet at the bank again raised concerns about the banking crisis. The S&P 500 Index fell 1.6 percent yesterday and the Nasdaq Index fell nearly 2 percent. The market has priced higher in the likelihood of the US Federal Reserve (Fed) cutting interest rates later in the year.
SALE OF ASSETS ON THE AGENDA
The US First Republic Bank has been faced with tough decisions, including creating a bank to transfer troubled assets or selling assets to turn a profit again, after deposits dried up last month due to the banking sector crisis .
One informed source said the bank’s options include selling up to $100bn in assets, while a second source said First Republic advisers had contacted potential buyers to give them preferred shares in exchange for the asset purchase.
‘SINGLE DEPOSIT OUTPUT’
Signature Bank CFO Neal Holland also stated that they experienced “unprecedented” deposit outflows after bank failures in March.
“We act quickly and leverage our high-quality portfolios of loans and securities to provide additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term debt.” he used the phrases.
WHAT HAPPENED?
First Republic Bank also faced financial difficulties after the failure of Silicon Valley Bank (SVB) and Signature Bank in the US last month.
In mid-March, 11 major banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, announced that they would transfer a total of $30 billion in deposits to support First Republic Bank, which was experiencing financial difficulties.