US regional banks will get off to a rocky start to the new week after troubled First Republic announced late Friday that it would suspend dividend payments on blue-chip stocks.
The company said it was a “prudent oversight measure” but the chiefs’ cut was a desperate move. The fear was that Citigroup would cut its favor in the first round of the financial crisis and eventual government bailout.
FRC shares closed Thursday at $14.03 from $147.68 in February. The problem with this share price is that it’s still too high to turn the company over to another bank for close to zero, but it’s also too low to inspire any kind of confidence.
FRC shares daily
Major banks poured $30 billion in deposits into First Republic last month in a bailout that seemed to work, at least for a while.
This will make for a fun start to the new week.