First Republic advisers have lined up potential purchasers of bank's new stock - CNBC

[April 26, 2023]  (Reuters) - First Republic Bank's advisers have already lined up potential purchasers of new stock in the lender if they can fix the bank's balance sheet, CNBC reported on Wednesday, citing sources. 

A person walks past a First Republic Bank branch in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. REUTERS/Mike Segar

The embattled lender's shares were down more than 10% in premarket trading, after hitting a record low in the previous session.

First Republic faces dwindling and tough options to turn around its business with the creation of a "bad bank" or asset sales possibilities, a source familiar with the matter told Reuters, after the lender showed the extent of deposit flight during last month's banking crisis.

The bad bank possibility is a crisis-type method of isolating financial assets that have problems.

First Republic reported a more than $100 billion plunge in deposits in the first quarter in the aftermath of the biggest turmoil to hit the banking sector since 2008.

The bank has been reeling in recent weeks as it navigates the twin challenges of assuring customers their deposits remain safe and investors that it has liquidity to emerge from the crisis.

(Reporting by Manya Saini in Bengaluru; Editing by Shounak Dasgupta)

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