Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Al Mayadeen's correspondent: One was killed, another injured in a raid by an Israeli drone on the city of Khiam in South Lebanon
London views possibility of setting fire to tanker in port of friendly country to Russia to damage port infrastructure, initiate an international probe: Moscow
One of London's scenarios involves setting up accident with 'undesirable' tanker in one of the bottlenecks of maritime communications: Russian foreign intelligence agency
London plans to organize major sabotage with tankers to declare transportation of Russian oil to international shipping: Russian foreign intelligence agency
UK intelligence agencies plan to use NATO allies to launch massive raid on 'Shadow Fleet': Russian foreign intelligence agency
Palestinian Ministry of Health: Two were martyred in Israeli shelling that targeted a besieged house in the town of Qabatiya in Jenin
At least 68 dead in migrant shipwreck off Yemen: IOM
Trump: We want to feed the people in Gaza, we do not want them to starve.
US President Donald Trump: We will impose sanctions on Russia if it does not end the war on Ukraine.
Israeli media: Polls show that 52% oppose Prime Minister Benjamin Netanyahu while only 29% support him.

US bank crash saga continues, First Republic shares collapse

  • By Al Mayadeen English
  • Source: Agencies
  • 29 Apr 2023 14:35
  • 1 Shares
4 Min Read

The market is closely monitoring the government's reaction to the crisis hitting the financial sector.

  • x
  • US bank crash rally continues, First Republic shares collapse
    A view of a First Republic Bank location in New York City (Reuters)

The US banking system continues to raise concerns after shares of First Republic plummeted over 50% on Friday as the bank's first quarter reports on Monday revealed that over $100 billion of deposits were withdrawn over customer fears.

First Republic closed the day at $3.51 down 43 percent, rebounding 7% of losses after trading of shares was paused several times due to extreme volatility.

On November 2021, the bank capital was more than $40 billion, while now it's worth only around $654.

Going into reverse from its peak days in November 2021 when it had a market capitalization of more than $40 billion, the bank now is worth only about $654 million.

Read more: Moody's cuts US banking sector view to negative after banks collapse

The Monday statement also mentioned that the issue of the deposits was stabilized after a consortium of 11 US private banks injected a $30 billion capital in the bank in mid-March and that the First Republic is "pursuing strategic options."

Despite reports of the potential bailout by other banks, so far they remain just reports.

The First Republic is the latest in a series of bank crashes the United States has been witnessing lately.

Following the collapse of Silicon Valley Bank (SVB), New York's Signature Bank, and Silvergate Bank, which marked a historic failure in the US banking system, many have attributed the collapses to soaring interest rates.

The Federal Reserve called on Friday for further imposing strict supervision of banks during a review of the collapse of SVB.

While recent earning reports of mid-sized banks saw a drop in profit forecast as tighter policies are expected to be introduced soon, some market specialists claimed that the financial reports are reassuring.

Related News

S&P downgrades US banks credit ratings, shares drop

US Treasury's Adeyemo: Recession looming if US defaults on debt

Read more: US to intervene in the market to counteract non-bank financial firms

According to CFRA Research analyst Alexander Yokum, the most probable coming scenario includes the sale of the First Republic after the Federal Deposit Insurance Corporation (FDIC) puts its hands on it or selling its assets to other financial firms.

But both scenarios would be faced with a common problem, which is the negative values of the bank's loans, that might affect the interest of prospective buyers due to the loss of value.

"Maybe the government will come up with some interesting way to make it enticing," Yokum said.

Action dilemma

So far, it is still unclear what steps the US government would take.

In normal cases, the Fed only covers depositors up to 250,000 in small and mid-sized banks. 

But following the bank collapses last March, the Fed and FDIC decided to guarantee deposits that exceed the $250,000 mark in attempts to fight contagion fear across the banking sector.

However, former FDIC Chair Sheila Blair said the government's "ill-advisedly created an expectation that for any future bank failures, uninsured deposits would be protected."

Read more: US capitalism is ‘breaking down before our eyes’: Griffin

Nonetheless, if the government did not take this action this time, "I do worry that that's going to surprise people and could be disruptive," she added.

Morningstar analyst Eric Compton deemed that First Republic's prospects have dropped since Monday, while the latest numbers only skyrocketed deposit flight.

"At this point, we feel that there is a material probability that the bank does not make it, and even if First Republic does survive, we think that the dilution of existing shareholders that would be required to resize the balance sheet would get current shareholders close to $0 as well." 

In March, former Lehman Brothers executive Lawrence McDonald revealed that 50 more US bank collapses could be underway if the US government does not address structural issues.

  • US Banks
  • United States
  • US
  • First Republic
  • Signature Bank
  • SVB
  • Silvergate

Most Read

A rescued crew member from the ETERNITY C vessel in a video released by the Yemeni Armed Forces on July 28, 2025 (Yemeni Military Media)

Yemen Navy reveals fate of targeted Eternity C ship crew

  • Politics
  • 28 Jul 2025
An Israeli tank explodes following an ambush by al-Qassam Brigades in Gaza, Occupied Palestine, undated (Al-Qassam Military Media)

Al-Qassam strikes Israeli vehicles in Gaza, inflicts casualties

  • Politics
  • 30 Jul 2025
UAE lodges complaint against Israeli ambassador over 'misbehavior'

UAE lodges complaint against Israeli ambassador over 'misbehavior'

  • Politics
  • 1 Aug 2025
Protesters chant anti-Israeli slogans as they carry a banner that reads:" Freedom for Palestine, Alliance stop the war," during a demonstration in support of Palestinians in Gaza, outside the Israeli embassy, in Athens, Monday, June 9, 2025 (AP)

Athens mayor slams Israeli ambassador over Gaza war, graffiti claim

  • Politics
  • 3 Aug 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
A member of the al-Qassam Brigades, the armed wing of Hamas, takes part in a parade as he celebrates a ceasefire agreement between Hamas and the Israeli regime in Deir al-Balah, Gaza Strip, Sunday, January 19, 2025 (AP)
Politics

Al-Qassam: We’ll allow aid to Israeli captives if Gaza siege ends

Freed Lebanese freedom fighter Georges Abdallah during an interview on Al Mayadeen, which aired on Sunday, August 3, 2025 (Al Mayadeen screengrab)
Politics

Exclusive: Resistance key to building state, Georges Abdallah says

United Nations Secretary General Antonio Guterres gives a statement about the situation in Gaza at UN headquarters, Friday, June 27, 2025 (AP)
Politics

UN warns Gaza faces water crisis, looming famine under Israeli siege

Israeli soldiers drive their armored personnel carrier along the Gaza Strip, in southern occupied Palestine, Wednesday, July 30, 2025 (AP)
Politics

Ex-Israeli general says Gaza starvation campaign isolated 'Israel'

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS