New York, Apr 24 (EFE).- The US bank First Republic, one of the hardest hit in the recent crisis, revealed on Monday that during the first quarter its deposits fell by more than 40%, but assured that the situation is stabilized and that it will now take steps to turn its business around, including cutting 20-25% of its workforce.
The Californian entity, which was swept up in the turbulence unleashed by the collapse of Silicon Valley Bank (SVB), today presented its quarterly accounts, which shed light on the crisis it experienced and which led a dozen large banks to come to its rescue and inject 30,000 million dollars (27,160 million euros at current exchange rates).
“With the closure of several banks in March, we experienced unprecedented deposit outflows. We acted quickly and used our high-quality portfolios of loans and securities to raise additional liquidity,” First Republic Bank CFO Neal Holland said in a statement.
As indicated, now the entity is working to restructure its balance sheet and reduce expenses and short-term loans.
The entity’s accounts show a huge outflow of deposits, which now total 104.5 billion dollars, 40.8% less than at the end of 2022 and 35.5% less than in the same period last year.
This figure also includes the 30,000 million dollars contributed by the big US banks, without which the fall would have been even greater, of close to 100,000 million dollars in total.
According to First Republic, the rapid flight of money that it suffered from the collapse of the SVB on March 10 was halted after that bailout and by the week of March 27 the situation had begun to stabilize.
As of April 21, the bank had deposits worth 102,700 million dollars, only 1.7% less than at the end of March and a consequence, above all, of the payment of taxes that many clients have to make in April.
As part of its earnings release, First Republic announced plans to bolster its financial health, including a reduction in its workforce, cuts in executive compensation, less office space and a reduction in non-core projects.
The bank expects to cut its number of employees between 20 and 25% during the second quarter of this year, as explained in the note, in which it did not give more details about the layoffs.
As for the results themselves, First Republic earned $229 million in the first quarter, 32.9% less than in the same period of the previous year, but above market expectations.
The entity’s shares, which had ended the trading session with a rise of 12% pending the disclosure of the accounts, fell almost 17% in electronic operations after closing.
