First Republic Bank's market value plunged below $1 billion for the first time ever on Wednesday after a report said the U.S. government was unwilling to intervene in the rescue process, hammering the lender's stock.
several roadblocks which could complicate rescue efforts for the San Francisco-based lender as it looks to emerge out of the crisis sparked by an outflow of more than $100 billion in deposits in the first quarter.
"The assets will be sold, but it may take some time and could be sold at a pretty severe discount to par," David Wagner, portfolio manager at Aptus Capital Advisors, said. At least three brokerages have cut their price targets on First Republic's shares since it reported first-quarter earnings on Monday.
"First Republic's problems are likely idiosyncratic ... and they obviously have a painful path in front of them," Art Hogan, chief market strategist at B Riley Wealth in Boston, said. A string of earnings reports from regional banks last week had reassured investors, but the banking sector has come under renewed pressure following First Republic's results.Reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta
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