S&P Global Downgrades First Republic Bank Stock to Junk, Shares Plunge 25% – Bitcoin News


UBS acquired Credit Suisse and 11 financial institutions injected $30 billion into First Republic Bank four days ago, but S&P Global downgraded First Republic’s shares to junk status on Sunday. Investors are concerned that the cash infusion may not address the bank’s liquidity issues, and so its shares dropped more than 15% on Monday morning when Wall Street opened and by 1:15 p.m. (ET), the stock was down more than 25%.

First Republic Bank Stock Slumps 25% Despite $30B Cash Infusion From 11 Lenders Last Week

At around 1:15 p.m. Eastern Time on Monday, March 20, 2023, shares of San Francisco-based First Republic Bank (NYSE: FRC) had plummeted more than 25% against the U.S. dollar. Last Wednesday, the commercial bank and wealth management services provider received $30 billion from 11 major banks, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, BNY Mellon, PNC Bank, State Street, Truist Bank, and US Bank.

Despite the cash injection, S&P Global downgraded the bank’s stock (FRC) to junk status on Sunday. This was the second downgrade of FRC in less than a week. In an effort to increase capital, First Republic has tried to issue more shares and seek investment from private equity firms and smaller banks.

This is First Republic’s second attempt to raise capital since March 10, and then it received the deposit injection from the major lenders six days later. CNN contributor Allison Morrow was told that First Republic is facing a fate similar to that of Silicon Valley Bank (SVB) due to being a “Bay Area-based lender with a deep-pocketed client base.” Patricia McCoy, a law professor at Boston College, told Morrow that depositors are “particularly trigger-prone.”

“They’re sophisticated, they know they have other options, and they have mechanisms in place to move money quickly,” McCoy added.

At 1:15 p.m. (ET) on March 20, 2023, First Republic’s shares had dropped more than 25% and were trading for just above $17 per share. This was in contrast to other banks, which managed to hold their ground on Monday following the Credit Suisse buyout.

Tags in this story
Bailout, Bailouts, Bank of America, Banking, Banking Bailouts, Banking Industry, banks, BNY Mellon, capital one financial, Cash Injection, CitiGroup, CNB Financial, credit suisse, deposit outflows, Discover Financial, Downgrade, FDIC, Federal Reserve, Financial Institutions, First Republic, First Republic Bank, First Republic Bank downgrade, First Republic Shares, FRC shares, FRC stock, Goldman Sachs, jpmorgan, Junk Status, Liquidity, morgan stanley, S&P 500, Signature Bank, Silicon Valley Bank, Silvergate Bank, state street, stimulus, Treasury, Truist Bank, Uninsured Deposits, US Bank, US Central Bank

What do you think about S&P Global downgrading First Republic Bank’s stock to junk status on Sunday? Share your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Sundry Photography / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Related articles

Recent articles