First Republic loses over US$100 billion in deposits after Silicon Valley Bank collapse
- The bank is exploring options as the news overshadowed its market-beating first-quarter profit and sent shares down 21 per cent
- First Republic came into intense focus after the SVB and Signature Bank closures prompted US customers to move billions of dollars to bigger institutions.
First Republic Bank’s deposits fell by over US$100 billion in the first quarter and it said it was exploring options including restructuring its balance sheet, overshadowing market-beating profit and sending its shares down 21 per cent after the bell on Monday.
The results mark the most important quarter for the troubled bank as it prepares to increase insured deposits, cut borrowings from the Federal Reserve Bank and loan balances, it said, while aiming to lay off nearly 20-25 per cent in the second quarter.
“We’re taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet,” an executive said in a post-earnings call, which ran for less than 15 minutes and ended without executives taking questions.
First Republic came into intense focus after Silicon Valley Bank (SVB) and Signature Bank collapsed last month, shaking the confidence in US regional banks and prompting customers to move billions of dollars to bigger institutions.
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“With the closure of several banks in March, we experienced unprecedented deposit outflows,” Chief Financial Officer Neal Holland said.
