© Reuters. People pass near a branch of First Republic Bank in New York, US, April 28, 2023. REUTERS/Eduardo Munoz
Written by Chris Prentice and Nupur Anand
NEW YORK (Reuters) – PNC Financial Services Group and JPMorgan Chase & Co (NYSE::) were among the banks preparing to make final bids for them. First Republic Bank (NYSE:) by midday Sunday at an auction run by US regulators, sources familiar with the matter.
Three sources told Reuters earlier that the FDIC was expected to announce a deal Sunday evening before Asian markets open, and the regulator was likely to say at the same time that it had taken over the lender.
U.S. regulators are trying to finalize a sale to First Republic over the weekend, sources said Saturday, with nearly half a dozen banks bidding, in what is likely the third major U.S. bank to fail in two months. Two sources familiar with the matter said on Saturday that Guggenheim Securities is advising the FDIC.
On Saturday, people familiar with the matter said Citizens Financial Group (NYSE:: Group Inc) was another bidder vying for the bank.
The FDIC was not immediately available for comment. Guggenheim, French Kennedy and Banks declined to comment.
The First Republic deal will come less than two months after Silicon Valley Bank and signature bank (OTC:) failed amid flight of deposits from US lenders, forcing the Federal Reserve to intervene with emergency measures to stabilize the markets.
And while the markets have calmed down since then, the First Republic deal will be watched closely to see how much support the government has to offer.
The FDIC officially insures deposits of up to $250,000. But fearing more bank runs, regulators took the extraordinary step of insuring all deposits at both Silicon Valley Bank and Signature.
It remains to be seen if regulators will have to do this at First Republic as well. They would need the approval of the Treasury Secretary, the President, and a supermajority on the boards of directors of the Federal Reserve and the FDIC.
In an effort to find a buyer before the bank closes, the FDIC is turning to some of the largest lenders in the United States. One of the sources said major banks have been encouraged to bid for FRC’s assets.
Comments are closed.