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BLOOMBERG
First Republic Bank shares rallied in US premarket trading after falling to a record low, as investors ponder what’s next for the struggling midsize lender following an offer of help from JPMorgan Chase & Co.
The stock jumped as much 27% in US premarket trading, with fellow regional lenders including Western Alliance Bancorp and PacWest Bancorp also rising. The rally follows a broad recovery in the banking sector across Europe and the US, as contagion concerns ease following UBS Group AG’s rescue deal for Swiss lender Credit Suisse Group AG.
The bounce to $15 a share still leaves the stock down 88% from its price before the SVB news came out.
JPMorgan Chase Chief Executive Officer Jamie Dimon has hatched a new plan to aid First Republic, Bloomberg News reported. That would convert some or all of the $30 billion in deposits that a group of US banks injected into a capital infusion for the California lender.
Still, investor confidence in First Republic has waned after the lender was downgraded again by S&P Global Inc, days after the ratings firm cut the lender to junk.