Since the end of December, the US bank reported that its deposits have decreased by more than forty percent.
It comes after Swiss banking behemoth Credit Suisse revealed the size of the bank run that precipitated its state-backed rescue a month ago. This news comes after it was reported yesterday.
The recent failure of a number of financial institutions has fueled concerns about an impending catastrophe in the sector.
First Republic Bank customers withdrew more than $100bn (£80bn) in the first three months of the year due to global banking system concerns.
Neal Holland, the chief financial officer of First Republic, stated that the company had a “unprecedented” amount of deposits leave the company as a result of the liquidation of many banks in March.
“We are working to restructure our balance sheet and reduce our expenses as well as our short-term borrowings,” he continued.
Additionally, First Republic stated that it intended to reduce costs by laying off between 20% and 25% of its personnel within the next several months.
Following the bank’s disclosure, shares of the company dropped by more than 20 percent during the extended trading session in New York.
One month ago, a number of the largest banks in the United States contributed $30 billion to First Republic, a financial institution that had been deemed to be in danger of failing.
The action was hailed as “most welcome” by US authorities, while financial institutions, led by JP Morgan and Citigroup, stated that it indicated their “confidence” in the market.
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- Warning that more trouble lies ahead for US banks
The fall of Silicon Valley Bank, which was the 16th-largest lender in the country and the worst failure of a US bank since 2008, signaled the beginning of the end for the banking industry in the United States at the beginning of the previous month.
That was then followed by the failure of New York’s Signature Bank which occurred two days later.
In an effort to prevent more runs on bank deposits, the authorities have taken the extraordinary step of guaranteeing deposits that exceed the customary restrictions.
The European banking giant Credit Suisse reported on Monday that 61.2 billion Swiss francs ($69 billion; £55.2 billion) had been withdrawn from the bank during the first three months of the year.
The news was shared during what was widely anticipated to be the company’s final set of financial reports, just prior to the conclusion of its forced sale to competitor UBS.
When it comes to fighting inflation, central banks all over the world, including the Federal Reserve in the United States and the Bank of England, have dramatically hiked interest rates in recent years.
The actions have resulted in a decrease in the prices of the big bond portfolios that banks purchased at a time when interest rates were lower.
This was a contributing factor in the failure of Silicon Valley Bank, and it has raised doubts about the state of affairs at other companies.
