First Republic Bank (FRB) reported an outflow of $72 billion in deposits. After that, the bank’s shares on the New York Stock Exchange collapsed 28% and continue to fall. FRB is ranked 14th in terms of consolidated assets on the US Federal Reserve’s list.
Customers of the American bank First Republic Bank (FRB) withdrew $72 billion of deposits in the first quarter of 2023. This is indicated in the bank’s financial statements for the first quarter of 2023.
Immediately after the report was published, FRB’s capitalization on the New York Stock Exchange began to fall. As of 17:20 Moscow time, the value of the bank’s securities decreased by 27.5%.
Related news: Nearly 200 banks may repeat the fate of Silicon Valley Bank
During the first quarter of 2023, FRB deposit volume decreased by 40%, from $176.4 billion in December 2022 to $104.5 billion. As of the end of 2022, FRB ranked 14th in terms of consolidated assets on the US Federal Reserve System (FRS) list.
FRB said it plans to cut costs, restructure its balance sheet and lay off up to 25% of employees in the second quarter of 2023 to address financial issues.
The outflow of funds from the FRB is associated with a panic in the banking sector, which began in 2023 after the collapse of Silvergate Bank and Silicon Valley Bank (SVB), notes The Wall Street Journal.
Related news: What happened to Silicon Valley Bank
The collapse of the American bank SVB, which ranked 16th among the largest banks in the US and specialized in working with start-ups, occurred on March 10. The FDIC estimates the damage from what happened at around $20 billion.
Bank holding company First Citizens Bank & Trust Company (FDIC) agreed to buy the bankrupt SVB’s assets. The cost of the deal will be $72 billion with a discount of $16.5 billion. Approximately $90 billion worth of securities and other assets will be transferred to the FDIC.
Author:
Kirill Bilyk
Source: RB
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