Troubled lender First Republic Bank is reportedly in discussions over an asset sale worth as much as $100 billion. Sources close to the matter, cited by Bloomberg News, claim that the sale would help address the bank’s asset-liability mismatch. At present, the bank has made no comment on the matter.
This news comes after First Republic Bank announced plans to downsize its balance sheet and reduce borrowings from the Federal Reserve Bank. The bank will also be increasing insured deposits and cutting expenses by reducing office space and executive compensation, while also cutting between 20% to 25% of its employees during the second quarter.
The San Francisco-based bank is clearly eager to streamline its operations and reduce risk, with the asset sale being seen as a further step in this direction. While it is unclear exactly what assets would be sold, it is expected that the bank will prioritize offloading underperforming or non-core holdings.
Analysts have suggested that the asset sale could help restore investor confidence in the bank, which has been facing various challenges in recent months. The exact timing of the sale remains unknown, but it is certain to be closely followed by investors and analysts alike.
At present, it is unclear how successful the asset sale will be in helping First Republic Bank overcome its financial woes. However, with the bank taking proactive steps to address its balance sheet and risk profile, it is hoped that this latest move will help put the bank back on track towards profitability and growth.