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US Banking Industry Still Struggling as First Republic Bank Shares Plummet by Over 30%

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In the midst of a tumultuous week, First Republic Bank is struggling to regain its footing in the financial world. Reports have surfaced that the bank is poised to enter government receivership due to a massive outflow of $100 billion in customer withdrawals last month. This has prompted investors to flee the bank, causing its shares to dive-bomb by over 50% on Tuesday.

Shares From America’s 14th Largest Bank Decimated Over the Last Two Days

The situation only worsened as pre-market trading began, and by 11:00 a.m. on Wednesday, First Republic Bank’s shares had fallen by over 30%. The decline in market capitalization has been a major concern for investors, who are increasingly worried about the bank’s stability and future prospects.

SCOOP (1/2): Bankers working w @firstrepublic bank say they expect eventual govt receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult. Officials at the big banks believed the Feds were

— Charles Gasparino (@CGasparino) April 25, 2023

Sources close to the matter have indicated that the banks which injected $30 billion into First Republic Bank may need to step in and provide additional assistance. Advisors to the banks have stated that failure to do so would result in a greater cost down the line. It is expected that the advisors to First Republic Bank will make a plea to the larger U.S. banks to provide further support.

The troubled bank has already taken significant steps to address its financial challenges, including the sale of assets and a significant reduction in its workforce, with 7,200 employees being laid off. However, it remains to be seen if these measures will be sufficient to restore investor confidence

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Author: Jamie Redman

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