Major US Banks Inject $30 Billion to Rescue First Republic Bank

Major US banks have invested $30 billion to rescue First Republic Bank, in a bid to reassure investors and customers about the stability of the financial system. This coordinated action comes after Silicon Valley Bank and Signature Bank's failure.

The money will help meet customer withdrawals and restore customer confidence in the San Francisco lender. A group of the country's largest banks, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Goldman Sachs each contributed $5 billion, with other smaller amounts provided by other lenders.

Bank of America

On Thursday afternoon, Bank of America invested $30 billion to save First Republic Bank. This move by a group of major US banks comes amid growing anxiety about the nation's banking system following last week's failures of Silicon Valley Bank and Signature Bank.

According to a joint statement released by the banks, JPMorgan Chase, Citigroup, Bank of America and Wells Fargo will each contribute $5 billion into First Republic, with Goldman Sachs and Morgan Stanley each providing $2.5 billion. Other institutions including BNY Mellon, State Street, PNC Financial and Truist will each provide $1 billion.

The announcement of the rescue was widely credited for lifting Wall Street indexes. Shares in JPMorgan and Morgan Stanley rose more than 1 per cent, while smaller lenders such as Fifth Third Bancorp, PNC Financial Services Group and KeyCorp experienced gains of more than 4 per cent.

Citigroup

Major US banks have contributed $30 billion to rescue First Republic Bank, a troubled regional lender in San Francisco. The initiative will provide the struggling lender with much-needed cash flow to meet customer withdrawals and restore confidence in the US banking system during this trying time for lenders.

Citigroup, the third largest bank in America, was one of the groups to contribute cash to First Republic. After learning of the deal, Citigroup's shares rose more than 10% that afternoon.

On Thursday, JPMorgan Chase, Bank of America, Wells Fargo and Citigroup each contributed around $5 billion to First Republic; Goldman Sachs and Morgan Stanley each added another $2.5 billion. These actions "reflect their confidence in First Republic as well as all banks," the banks said in a statement.

JPMorgan Chase

On Thursday, 11 major US banks invested $30 billion into First Republic Bank, bailing out the San Francisco lender that has been hit hard by the failures of two mid-size lenders last week. Their coordinated action shows their trust in the system and shows they are determined to prevent another banking catastrophe like Silicon Valley Bank's demise last Friday.

According to people familiar with the conversation, JPMorgan Chase chief executive Jamie Dimon agreed to join after Treasury Secretary Janet Yellen brought up the idea during a phone call on Tuesday. Under the plan, each of the largest banks will contribute $5 billion in deposits, while other lenders chip in smaller sums.

Wells Fargo

On Thursday afternoon, First Republic Bank shares rose after a group of major US banks invested $30 billion into the troubled lender to help restore its finances. This comes amid growing fears about the stability of America's banking system among Wall Street and Washington policymakers, with several smaller lenders seemingly on the brink of failure.

Wells Fargo, the nation's largest bank by assets, is among the lenders contributing to First Republic's rescue plan, according to a joint statement from both banks. The lender has more than 80 branches throughout America, including Boston and Cambridge.

This investment is intended to assuage investor and depositor fears that First Republic Bank could experience a run on its deposits. It was developed after discussions between US Treasury Secretary Janet Yellen and JPMorgan Chase Chief Executive Jamie Dimon.

Goldman Sachs

America's top banks invested $30 billion to save San Francisco-based First Republic Bank, a lender serving an upscale clientele including tech startups. This action came after the stock of the regional lender dropped and fears about a financial crisis spread.

JPMorgan Chase, Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Wells Fargo & Co, Goldman Sachs and Morgan Stanley have each committed $5 billion in uninsured deposits to First Republic. BNY Mellon, State Street and PNC Financial will each contribute $1 billion.

Two sources indicated that senior officials from the Treasury Department, Federal Reserve and other major banks collaborated on this deal after First Republic's shares experienced a sharp decline this week. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell had discussed it earlier in the week, according to two sources.

Morgan Stanley

Morgan Stanley is a global investment bank with an extensive client base in corporate, government and high-net-worth markets. It provides investment banking, equity research and trading, wealth management as well as asset and fund management services to its clients.

The Financial Stability Board considers the firm to be a systemically important bank. Its primary revenue comes from its Institutional Securities business, which caters to corporations, governments and high-net-worth clients alike.

Net revenues in the Investment Management group increased in 2021 due to market appreciation and net positive flows. The division generates its income by charging a percentage on assets it manages.

Investment strategy at CIM involves alpha-generating investment strategies and market research/commentary. Furthermore, the firm boasts an expansive content library with hundreds of thousands of pages covering investment tactics, market analysis and analyst insights.

BNY Mellon

Two of the nation's largest banks are close to finalizing a deal to inject $30 billion into First Republic Bank in an effort supported by the US government to stabilize the battered California lender, according to sources familiar with the matter. Participating banks include JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Wells Fargo & Co., Morgan Stanley, U.S. Bancorp, Truist Financial Corporation and PNC Financial Services Group Inc.

On Thursday afternoon, First Republic was announced as the third major bank to go bust within a week - following Silicon Valley Bank and Signature Bank. The move also helps prevent fears that the banking crisis could spiral out of control. Federal officials, including Treasury Secretary Janet Yellen in a joint statement, expressed their appreciation for these injections: they were "much needed".

PNC Financial

On Thursday, a group of major US banks invested $30 billion to save First Republic Bank from bankruptcy, ending an unprecedented crisis caused by the failure of two other mid-size lenders. JPMorgan Chase led a consortium of 11 private banks including Silicon Valley Bank and Signature Bank's closure last week; their intervention put at ease fears that San Francisco-based lender could follow in their footsteps.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo will each contribute $5 billion of uninsured deposits to First Republic; Goldman Sachs and Morgan Stanley each contributing $2.5 billion.

At market close, First Republic shares rallied back above $34 per share, reversing their three-quarters decline this month. Other regional banks also experienced a similar reaction.

State Street

First Republic Bank was saved by 11 major US banks with a $30 billion deposit, providing much-needed stability to the San Francisco lender after its shares declined more than 70%. This action was an indication of support by America's biggest lenders as they navigate through an unprecedented banking crisis.

US regulators praised the move, which demonstrated the confidence of America's largest banks in its financial system. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo will each contribute $5 billion while Goldman Sachs and Morgan Stanley each contributed $2.5 billion.

Depositors and investors were hoping the money would put to rest their fears that First Republic and other mid-size lenders could experience dangerous runs. On hearing of the funding, the regional bank's share price spiked 10%; however, after-market trading saw it tumble 18% due to downgrades from credit rating agencies.

Truist

Major US banks are injecting $30 billion to rescue San Francisco-based First Republic Bank. This money is intended to assuage growing concerns about the stability of the financial system.

Treasury Department, Federal Reserve and FDIC announced a rescue of the banking industry. A joint statement from Yellen, Powell and Gruenberg expressed their confidence in its resilience.

Truist, created through the merger of BB&T and SunTrust Banks in 2019, is one of the largest banks in America; second only to Bank of America (BAC) and Chase (JPMorgan).

Truist offers online services in addition to its many branches, as well as offline options for customers who don't live near one of its locations. Furthermore, Truist has an insurance division which contributes approximately 10% of its revenue.