June 2, 2023

Dubai Week

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Wall Street’s “First Republic” Stock Price Crash and No Rescue Plan | economy

American First Republic Bank’s share price hit a new low on the New York Stock Exchange on Friday, while rumors swirled about a yet-to-be-realized strategy or plan to rescue it.

By the end of yesterday’s session, the bank’s share price – ranked 14th among the largest US banks by asset size in 2022 – fell 43% on Wall Street to $3.51. Up and Down.

Therefore, the value of the bank is estimated at $ 654 million, while it was $ 20 billion at the beginning of the year and $ 40 billion at its peak in November 2021.

Founded in 1985 and headquartered in San Francisco, First Bank has branches primarily in California and East Coast cities and serves affluent clients.

But his fate remains unclear after he failed at two other banks last March. All three banks focus on specific customers and/or a specific geographic area.

Officials and other financial institutions sought to avoid the fate of Silicon Valley Bank and Signature Bank First Republic, which went bankrupt after suddenly withdrawing large amounts of money from customers.

The Wall Street Journal, citing sources close to the file, reported that the American Deposit Insurance Corporation may acquire the bank and sell its assets to another entity.

Other companies interested include JPMorgan and PNC Financial Services.

The bank confirmed last Monday evening that many of its customers had withdrawn deposits of more than Sh100 billion in the first quarter of this year.

He relied on $30 billion that other banks put into his accounts, but that wasn’t enough in the eyes of investors, which led to a drop in stock prices on Tuesday and Wednesday, ending the day before yesterday, Thursday.

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