“First Republic Bank Loses Over $100B in Deposits and Faces Uncertain Future”

The California-based lender, First Republic, has suffered an enormous loss of customer deposits, with withdrawals totalling over $100 billion last month causing a 40% decline in deposits held by the bank in the first quarter of this year. Although rival banks have also seen declines in deposits, they were generally single-digit percentages, making First Republic’s situation significantly worse. The bank’s shares fell as much as 20% in after-hours trading, though they recovered slightly to be 18% lower overall; the bank’s stock is down by over 90% this year. First Republic revealed that it will cut up to 25% of its workforce in the next two months and make other savings in order to lower costs. There has been speculation that the bank will be sold in full or part, and First Republic confirmed that it was pursuing “strategic options”. While First Republic CEO Michael Roffler believes the bank has kept 90% of its client relationships through the turmoil, Moody’s downgraded the bank’s preferred shares last week, stating that the “long run path for the bank back to sustained profitability remained uncertain.”

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