June 17, 2024
JPMorgan CEO Jamie Dimon working to raise more support for First Republic: WSJ

JPMorgan CEO Jamie Dimon working to raise more support for First Republic: WSJ

JPMorgan Chase & Co. Chief Executive Jamie Dimon is working to raise additional capital for First Republic Bank, The Wall Street Journal reported Monday.

JPMorgan Chase JPM, +0.68% CEO Dimon is leading banks in a fresh campaign to shore up First Republic Bank after he helped lead a $30 billion placement in deposits with First Republic from 11 banks.

First Republic stock FRC, -36.91% was paused for trade after losing 37% of its value on Monday. Trading resumed in the early afternoon Eastern time, with the stock down about 31%.

Discussions are under way to find ways to convert $30 billion in deposits from 11 banks last week into a capital raise, said the WSJ report, which cited people familiar with the situation.

Over the weekend, S&P downgraded the company’s debt to B+ in the debt rating firm’s second First Republic cut in less than a week.

The WSJ report on Monday said the banks may make an investment in First Republic as part of a capital injection.

A bank spokesperson did not reply to an email from MarketWatch. A spokesperson from JPMorgan declined to comment.

Over the weekend, a First Republic spokesperson said, “First Republic Bank is well-positioned to manage short-term deposit activity,” according to the WSJ article.

First Republic stock has lost more than 80% of its value this month to record lows, as investors took note of a flight of deposits from the bank.

With exposure to wealthy clients and upper management people in Silicon Valley, First Republic has been swept up in concerns about further bank failures after the collapse of Silicon Valley Bank, Signature Bank and Silvergate Bank in the past couple of weeks.

The bank has been booking billions of dollars in lost deposits, but said the flight had slowed by late last week.

First Republic also carries a large percentage of uninsured deposits, which are more vulnerable to being withdrawn at short notice.

Also Read: First Republic falls to record low but U.S. bank stocks rise on FDIC moves and hopes of a pause in interest rates

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