Authorities are trying to secure the sale of struggling First Republic Bank ahead of a government takeover
The Federal Deposit Insurance Corporation (FDIC), the top federal regulator of U.S. banks, has set a Sunday deadline for bids to buy the troubled First Republic Bank, multiple news outlets reported on Saturday, citing sources.
Earlier this week, the FDIC asked a number of institutions, including the nation’s largest bank, JPMorgan Chase, to submit offers for the failing bank in a bid to find a buyer before it was put on hold. under sequestration. As receiver, the FDIC would temporarily manage the affairs of the bank until its assets were sold.
A source told FOX Business there were five possible bidders and the winner would likely be announced later Sunday or Monday morning.
Receivership is imminent, according to Reuters, given its share price fell 75% last week following dismal first-quarter results and strong deposit outflows. Shares hit a record low of $2.99 on Friday as the bank’s shares fell nearly 98% year-over-year.
A seizure by the FDIC would make First Republic Bank the third U.S. lender to fail after the collapses of Silicon Valley Bank and Signature Bank in March. Both were shut down by regulators following massive bank runs.
Analysts say, however, that picking a buyer before announcing a government takeover would allay fears of further contagion in the U.S. banking sector and ease pressure on the FDIC’s deposit insurance fund.
U.S. scrambles to save failing bank – Reuters
JPMorgan and the FDIC declined to comment on the information.
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