First Republic Bank shares rose on Thursday along with banking peers, set for a tentative rebound from yesterday’s losses following disappointment over comments from Treasury Secretary Janet Yellen over bank deposits.
(Bloomberg) — First Republic Bank shares rose on Thursday along with banking peers, set for a tentative rebound from yesterday’s losses following disappointment over comments from Treasury Secretary Janet Yellen over bank deposits.
The lender’s shares tickep up 3.5% in US premarket trading Thursday. Regional banking peers Western Alliance Bancorp and PacWest Bancorp were also trading slightly higher. The gains in First Republic are pale in comparison to the loss of nearly 90% it has sustained this year.
Banking stocks came under pressure on Thursday after Yellen said regulators aren’t looking to provide “blanket” deposit insurance to stabilize the US banking system, while Federal Reserve Chair Jerome Powell’s determination to curb inflation dashed hopes of rate cuts this year.
California-based First Republic known for serving wealthy executives in the technology industry, has plummeted over the past two-and-a-half weeks amid growing turmoil in the industry. The swift demise of three banks, including Silicon Valley Bank, spurred worries over liquidity and saw clients pull funds.
Wall Street lenders and US officials are looking at the possibility of government backing to encourage a deal that would shore up First Republic, Bloomberg has reported, citing people with knowledge of the situation.
Sentiment remains fragile, however. Fitch Ratings downgraded First Republic, citing its new more costly funding profile, with the move following S&P Global Inc.’s downgrade of the company over the weekend. Citi analysts moved the lender’s rating to “under review” given volatility in the shares.
READ MORE: First Republic Leaders Forgo Bonuses, Some Pay Amid Turmoil (2)
The KBW Bank Index, which has dropped 27% since March 3, has rebounded barely 1% this week.
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