First Republic shares fell in pre-market trade on Friday after the bank suspended its dividend and the largest US banks swooped in to shore up the lender’s finances with $30bn in aid.
JPMorgan Chase, Bank of America, Citigroup and Wells Fargo will each deposit $5bn into First Republic, a California-based lender. Goldman Sachs and Morgan Stanley will put in $2.5bn apiece while BNY Mellon, PNC Bank, State Street, Truist and US Bank are depositing $1bn each.
“The actions of America’s largest banks reflect their confidence in the country’s banking system. Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most,” the banks said in a statement on Thursday.
But later on Thursday, the bank announced it was suspending its dividend “during this period of uncertainty”. The bank also said it would look to shrink its borrowing, as well as the size and composition of its overall operations.
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