First Republic shares book slim gains after brutal sell-off

[April 27, 2023]  (Reuters) - First Republic Bank's shares rose nearly 5% premarket on Thursday, following a bruising sell-off that wiped out 60% of the stock's value this week.  

Traders gather at the post where First Republic Bank as the stock is halted from being traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 15, 2023. REUTERS/Brendan McDermid

The slide was triggered by the bank's disclosure on Monday that it had lost more than $100 billion of deposits in the first quarter of the year.

First Republic's woes this weak has brought the banking sector under renewed pressure as it looks to recover from the biggest turmoil since 2008.

"First republic lost and is continuing to lose deposits. No bank on earth can survive if its customers pull their money out of the bank – especially if it happens all at once," said Adam Sarhan, CEO of 50 Park Investments.

"If First Republic fails or is bailed out, that will likely cause more downward pressure on the already beaten down financial sector."

U.S. bank regulators are weighing the prospect of downgrading their private assessments of the San Francisco-based lender, according to a report from Bloomberg News on Wednesday.

The downgrade could lead to restrictions on First Republic's ability to borrow from the U.S. central bank, the report said.

(Reporting by Niket Nishant in Bengaluru; Editing by Saumyadeb Chakrabarty)

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