The group of US banks that came to First Republic’s help last week were considering converting some or all of their $45b in deposits into a capital infusion.
P Global lowered the lender’s credit rating for the second time in a week and thereported that executives from major banks were discussing fresh stabilisation efforts.
The discussions, led by JPMorgan chief executive officer Jamie Dimon with the heads of other big banks, included possibly converting some or all ofFirst Republic Bank not out of the woods yet.Earlier, SP said First Republic’s $US30 billion deposit from some of Wall Street’s biggest lenders may not solve the “substantial” challenges the bank is now likely facing, even if it does ease near-term pressure on liquidity.
“We do not view this deposit infusion – which has an initial maturity of 120 days – as a longer-term solution to the bank’s funding issues. In addition, we think attracting meaningful deposits will be difficult, constraining the bank’s business position.”P lowered its long-term issuer credit rating on First Republic to ‘B+’ from ‘BB+’.
First Republic bucked a broader rally in regional banks that was led by New York Community Bancorp’s record 35 per cent gain. NYCB surged after being upgraded by at least two analysts following its agreement to take over Signature Bank’s deposits and some of its loans.
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