American Bank The first republicwhich was subjected to a new rating downgrade by Standard & Poor’s, which is considered “maybe” The $30,000 million in insufficient aid from a group of major banks sank back into Wall Street on Monday.
Despite the upward trend in the shares of other banks, First Republic shares, which have already lost 80% of their value in eight sessions, They were still down 17% in early trading for the sessionwith some rebounding to a 15% decline at 14:15 GMT.
The rest of the sector appears calmer after the emergency measures taken in the US to restore confidence in the banking system and the purchase of Credit Suisse by UBS announced on Sunday.
UBS agreed on Sunday to pay 3 billion Swiss francs ($3.2 billion) to buy Credit Suisse, at 0.76 francs per share, after intense negotiations with the finance ministry, the central bank and the Swiss market supervisor (FINMA).
Major US banks such as JPMorgan, Bank of America, and Citigroup were gaining 2.2%, 1.7%, and 2.5%, respectively, on Wall Street. Mid-size banks, which were hit hard last week, were also recovering, such as PacWest (+21.7%), Zion (+8.3%) or Western Alliance Bancorporation (+7.3%).
S&P Global Ratings, which placed First Republic in the speculative investment category last Wednesday, downgraded the organization another three notches on Sunday.
Deposits of $30,000 million in the First Republic placed by eleven large banks “would mitigate the need for liquidity in the short term,” S&P highlights in a note.
“However, this may not solve the strategic, liquidity, financing and profitability problems facing the bank,” the agency added.
S&P warned that it could downgrade First Republic, which trades under the symbol FRC, “if the bank fails to show progress in stabilizing deposits and restoring the value of the company, which is likely to be eroded.”
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