Bank shares moved into positive territory on Monday despite heavy losses in US-listed Credit Suisse stock, as the Federal Deposit Insurance Corporation successfully completed home searches for two of them. three banks went bankrupt earlier this month.
After a new debt downgrade over the weekend, First Republic Inc.
fell 14% to an all-time low of $19.81 a share, below a record low close of $22.48 on October 3, 2011.
Shares of Credit Suisse listed in the US
down 49%, while that of UBS Group
8% increase after UBS said it would pay $3.25 billion to buy its Swiss rival to stabilize the banking system.
San Francisco-based First Republic Bank is planning to raise money from other banks or private equity firms by selling new shares, New York Times report late on Friday, citing people with knowledge of the discussions.
While this bank received $30 billion in deposits from 11 banks last weekit lost $89 billion in deposits during the same period, according to figures the bank released late Thursday.
S&P said Sunday that it downgraded First Republic’s rating three more places, to B+, just four days after it downgraded. by four degrees from A- to BB+speculative ratings or junk ratings.
“The $30 billion deposit the First Republic reports it will receive from 11 major U.S. banks will ease liquidity pressure in the short term, but it may not address the challenges facing the United States. significant business, liquidity, funding and profitability knowledge that we believe the bank may currently face. faced,” said S&P.
Rated “B” at S&P means an entity that is “more vulnerable to adverse business, financial and economic conditions but is now capable of meeting financial commitments,” the rating agency said.
Typically, one downgrade equates to a 0.25% increase in borrowing costs, but multiple downgrades can affect a company more as a sign of bigger trouble ahead.
JPMorgan Chase & Co.
up 1.5%, Goldman Sachs Group Inc.
up 1.6%, Bank of America Corp.
up 0.8% and Citigroup
increased by 1.5%. Wells Fargo & Co.
up 0.3% and Morgan Stanley
increased by 1.8%.
KBW Nasdaq Bank Index
up 3.3%, Financial Select Sector SPDR exchange-traded fund
up 4.7% and SPDR S&P Regional Banking ETF
nearly 5% increase.
Among the bulls, New York Community Bancorp
is up 33% after its Flagstar Bank unit said it would take on most deposits and some loans with Signature Bank, one of three financial firms that shut down operations in the past two weeks.
New York Community Bancorp CEO Thomas R. Cangemi said the deal does not cover any of Signature Bank’s digital asset business.
Wedbush on Monday upgraded Bancorp New York Community to above neutral based on expected earnings growth from redemption Signature Bank’s loan and deposit portfolio.
“[New York Community Bancorp] analyst David Chiaverini said in a research note.
FDIC says Flagstar will receive Signature Bank40 old branches as of Monday.
SVB Financial, the former parent company of Silicon Valley Bank, said on Monday it had received “considerable interest” from potential buyers in an ongoing reorganization effort with financial advisors. main Centerview Partners LLC.
The company also said it had filed a “first day petition” with the US bankruptcy court to support the operations of SVB Capital and SVB Securities.
On March 14, SVB Financial Group filed a voluntary petition for court-supervised reorganization under Chapter 11 of the US bankruptcy code after deposit withdrawals led to Silicon Valley Bank bankruptcy. produce. Silicon Valley Bank now operates as Silicon Valley Bridge Bank NA under the jurisdiction of the FDIC and is no longer affiliated with SVB Financial.
The FDIC said it would expand tenders for the former units and assets of Silicon Valley Bank, which the government took over on March 10.
“There has been significant interest from many parties, and the FDIC and contractors need more time to explore all options to maximize value and achieve optimal results,” the FDIC said.
The FDIC said it will allow parties to submit separate bids to Silicon Valley Bridge Bank and Silicon Valley Private Banking entities. The FDIC said eligible, insured banks, as well as eligible, insured banks affiliated with non-banking partners, will be able to submit bids or bids of entire bank for deposits or assets of institutions.
Banks and non-banking finance companies will be allowed to bid on asset portfolios. Bid for Silicon Valley Private Bank is due at 8 p.m. ET on March 22 and on March 24 for Silicon Valley Bridge Bank.
22% increase after that said on Friday it had maintained solid liquidity.
Citi’s U.S. banking analyst Keith Horowitz said the company has “answered a lot of domestic questions about whether deposits are leaving the system altogether.”
All told, about $325 billion has left the US banking system from deposits, the majority of which has gone into the Treasury, he said.
Horowitz said the money used to buy Treasuries would be spent by the government and “ultimately recycled back into the system as deposits.”
Tomi Kilgore and Claudia Assis contributed to this article.