(Bloomberg) — First Republic Bank shares rose in early trading as all eyes remained on how talks aimed at shoring up the midsize lender were progressing amid a crisis of confidence.
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The Californian lender’s shares gained as much as 7.5% in US premarket trading, still nowhere close to wiping this year’s 87% loss. Wall Street leaders and US officials discussing an intervention at First Republic Bank are exploring the possibility of government backing to encourage a deal, Bloomberg reported, citing people with knowledge of the matter.
The bank, which caters to affluent clients via its wealth-management business, has seen its shares collapse over the past fortnight as the failure of three lenders, including Silicon Valley Bank, in quick succession shook confidence in regional lenders, with customers rushing to withdraw deposits.
Regional banking peers Western Alliance Bancorp and PacWest Bancorp also gained. While the KBW Bank Index has risen nearly 6% so far this week, the gauge of 22 banking stocks remains down 24% since March 3.
The banking sector was in focus ahead of a key interest rate decision from the Federal Reserve due later in the day, with the central bank caught between a choice of hiking, or pausing, amid turmoil in the financial industry.
In a bid to shore up confidence, a group of 11 Wall Street banks pledged $30 billion to boost First Republic’s finances. US officials are also looking at ways to insure all bank deposits in order to stave off a potential financial crisis, Bloomberg reported on Tuesday.
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Source: https://finance.yahoo.com/news/first-republic-shares-inch-higher-081253210.html