First Republic Bank was poised to extend last week’s record loss as the US lender’s shares plunged after S&P Global Inc. cut its credit rating again and the emergency sale of Credit Suisse Group AG to UBS Group AG failed to assuage fears over the banking system’s health.
(Bloomberg) — First Republic Bank was poised to extend last week’s record loss as the US lender’s shares plunged after S&P Global Inc. cut its credit rating again and the emergency sale of Credit Suisse Group AG to UBS Group AG failed to assuage fears over the banking system’s health.
First Republic’s shares slumped as much as 37% in US premarket trading on Monday, following last week’s record 72% retreat. Fellow regional lender Western Alliance Bancorp followed suit with a loss of 6.3%, while shares in Wall Street’s biggest lenders also came under pressure, with JPMorgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and Citigroup Inc all sliding over 1%.
The recent collapse of three lenders, including Silicon Valley Bank in the US has knocked confidence in the financial industry and stoked worries that depositors are pulling their funds and harming bank liquidity. The KBW Bank Index shed 15% of its value last week amid the turmoil.
Credit Suisse’s troubles, which culminated in UBS agreeing to buy the Swiss bank in a government-brokered deal for $3.2 billion, have added to sentiment souring. Credit Suisse’s shares dropped as much as 65% on Monday in Zurich trading, while UBS fell as much as 16%.
Some of the biggest US banks pledged $30 billion of fresh cash for First Republic last week to stem the turmoil, though the lender’s shares remain volatile and sentiment fragile.
READ MORE, US Banks on ‘Bumpy’ Path as First Republic’s Troubles Persist
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