Giant banks take action again to save First Republic Bank

The US government has asked financial groups, including JPMorgan and PNC, to bid for all or part of the ailing First Republic Bank.

Sources told the Wall Street Journal that JPMorgan, which had previously brought together 11 banks to place $30 billion in deposits with the First Republic, is preparing to bid for a post-resolution deal.

ACCESS GRANTED

On Wednesday, the FDIC asked banks how much they were willing to pay for First Republic’s deposits and assets. And on Friday, the regulator offered to contact JPMorgan, PNC and several other banks to provide access to more detailed information on First Republic.

Potential bidders were given digital access to a data room with extensive information on First Republic’s assets.

THE REGULATORY AUTHORITY WILL HELP

The banks were told that bids would be welcome and that the winning bidder would likely receive some help from the FDIC’s insurance fund. Bidders had until Sunday to submit their final offers.

According to the sources, both the First Republic and the government said the FDIC takeover process will be cleared up in the last 24 hours to stabilize the bank. JPMorgan and PNC declined to comment officially on the matter.

WHAT HAPPENED?

Last month, First Republic Bank also experienced financial difficulties following the failure of Silicon Valley Bank (SVB) and Signature Bank in the US.

In mid-March, 11 major banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, announced they would transfer a total of $30 billion in deposits to support First Republic Bank and prevent the spread of runaway banks by restoring confidence. in the banking sector

First Republic’s balance sheet for the first quarter of the year revealed that the bank’s deposits were down 40.8 percent at the end of March compared to the end of last year, despite $30 billion from major US banks.

First Republic shares, which experienced large deposit outflows after Silicon Valley Bank collapsed on March 10, have lost 97 percent of their value this year on concerns.