- Rating agencies S&P Global and Fitch downgraded First Republic’s credit rating to junk status.
- The bank is now considering several options, including a sale and increasing liquidity, Bloomberg reported.
- If it goes on sale, it could be of interest to larger lenders.
First Republic Bank is considering several options, including a sale, Bloomberg reported Wednesday, citing those with knowledge of the matter.
According to Bloomberg, the bank is expected to attract interest from larger lenders if it goes on sale. The San Francisco-based lender is also looking at options to increase liquidity, the news outlet said.
Credit rating agencies S&P Global and Fitch had downgraded First Republic’s credit rating to junk status earlier on Wednesday over concerns that depositors could take money from the lender.
First Republic has been assuring clients of its liquidity since the implosion of Silicon Valley Bank – which in turn raised concerns about the financial health of regional banks.
On Sunday, First Republic said it received $70 billion in additional funding from the Federal Reserve and JPMorgan Chase after its stock price fell sharply amid the Silicon Valley Bank implosion.
“We believe that the risk of deposit outflows at First Republic Bank has increased despite the actions of federal banking regulators and the bank actively increasing its availability of loans to mitigate the risk associated with last week’s bank failures. limit,” said Nicholas Wetzel, analysts at S&P Global Ratings. and Rian Drukman.
First Republic’s share price closed 21.4% lower on Wednesday at $31.16 apiece. They are down 74% so far this year.
First Republic Bank did not immediately respond to Insider’s request for comment, which was sent outside of normal business hours.
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