The American bank First Republic, one of the hardest hit in the recent crisis, revealed on Monday a reduction in its deposits of more than 40% in the first quarter of the year, but assured that the situation is stabilized and that it will now take measures to turn your business around, including layoffs. Thus, it is considering a cut of between 20% and 25% of its workforce.
The Californian entity, which was dragged by the turbulence unleashed by the collapse of Silicon Valley Bank (SVB), presented its quarterly accounts on Monday, which shed light on the crisis it experienced and which led a dozen large banks to go to his rescue and inject 30,000 million dollars (27,160 million euros at the current exchange rate).
“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 obtain additional liquidity,” First Republic Bank CFO Neal said in a statement. Holland.
As indicated, the entity is now 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 104,500 million dollars (some 94,596 million euros), 40.8% less than at the end of 2022 and 35.5% less than in the same period from last year.
This figure also includes the 30,000 million dollars contributed by the big American banks, without which the fall would have been even greater, of about 100,000 million dollars in total (some 90,523 million euros).
According to First Republic, the rapid flight of money that it suffered as of March 10 with the collapse of the SVB was halted after that bailout and by the week of March 27 the situation had begun to stabilize.
Until last Friday, the bank had deposits worth 102,700 million dollars (about 92,953 million euros), 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 has 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.
Regarding the results themselves, First Republic earned 229 million dollars (about 207.2 million euros) in the first quarter, 32.9% less than in the same period of the previous year, but above expectations. From the market.
The entity’s shares, which had ended the trading session with a 12% rise pending the accounts, fell almost 17% in electronic operations after closing.
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