(Bloomberg) — First Republic Bank, the San Francisco-based lender that was cut to junk on Wednesday by S&P Global Ratings and Fitch Ratings, is exploring strategic options including a sale, according to people with knowledge of the matter.
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The bank, which is also weighing options to shore up liquidity, is expected to attract interest from larger rivals, said some of the people, all of whom requested anonymity discussing confidential information. He added that no decision has been made and the bank may still choose to remain independent. A spokeswoman for First Republic Bank declined to comment.
First Republic said on Sunday it had more than $70 billion in untapped liquidity to fund operations from agreements involving the Federal Reserve and JPMorgan Chase & Co. Still, its stock fell 21% to $31.16 in New York trading Wednesday. fell to its lowest level in a decade. Gave it a market value of $5.8 billion.
“The ability to borrow additional from the Federal Reserve, continue to access funding through the Federal Home Loan Bank, and access additional financing through JPMorgan Chase & Co. increases, diversifies, and First Republic further strengthens the existing liquidity profile of RBI,” the bank said in Sunday’s statement.
The lender specializes in private banking and wealth management, and has attempted to differentiate itself from Silicon Valley Bank, which has been seized by US regulators. Unlike SVB, which counted startups and venture firms among its largest clients, First Republic said no sector represented more than 9% of total business deposits.
— With assistance from Jenny Surane.
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