American citizens and foreign investors have rushed to withdraw their deposits from First Republic Bank (FRC) after a series of bank collapses raised fears of a crisis in this vital sector.
According to American reports, shares of FRC plunged almost 50% on Wednesday, and are down another 30% today. The bank’s market cap approximately fell below $1 billion in intraday trading, a small fraction of its $40 billion peak in November 2021.
The collapse came just a day after the mid-size US bank revealed that customers had pulled more than $100bn (£80bn) from their accounts amid last month's banking panic.
In a statement, the afflicted bank said it lost roughly 40% of its deposits in the days following those collapses, as customers rushed to withdraw funds.
It said the situation had since stabilized, adding that it was pursuing "strategic options" to strengthen its position, including cutting costs by shedding 20% to 25% of its workforce in the coming months.
In March, problems in the banking sector surfaced in the US when Silicon Valley Bank, which was the country's 16th-largest lender, collapsed in the biggest failure of a US bank since 2008.
That was followed two days later by the failure of New York's Signature Bank.
In response, authorities stepped in to guarantee deposits beyond typical limits in an effort to head off further runs on bank deposits.
However, that decision did not immediately prevent concerns from spreading. In Europe, Swiss officials also brokered a rescue for troubled banking giant Credit Suisse, which saw 61.2bn Swiss francs ($69bn; £55.2bn) leave the bank in the first three months of the year.
Meanwhile, central banks around the world - including the US Federal Reserve and the Bank of England - have sharply increased interest rates as they try to curb inflation.
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