Shares Fall as First Republic Bank Seeks Recovery Options
The embattled lender experienced a sharp drop of over 10% in premarket trading after reaching a record low in the previous session. First Republic Bank is exploring limited and challenging options for a turnaround, such as creating a "bad bank" or engaging in asset sales, as reported by a source familiar with the matter to Reuters.
"Bad Bank" Option Explored Amid Banking Crisis
The "bad bank" concept is a crisis-management technique that separates problematic financial assets. First Republic Bank is considering this option after experiencing significant deposit flights during the recent banking crisis.
First Republic Bank Reports $100 Billion Deposit Drop
In the aftermath of the most significant banking turmoil since 2008, First Republic Bank reported a staggering decline of over $100 billion in deposits during the first quarter.
Bank Struggles with Customer Assurance and Liquidity
First Republic Bank has been facing numerous challenges recently, including assuring customers that their deposits are secure and convincing investors that the bank has the liquidity to overcome the crisis.