Despite a gain of 12% on Monday, share prices of First Republic Bank fell more than 20% after the closing bell on the report of the bank’s deposits falling by more than $100 billion in the first quarter of this year.
The bank said that it was exploring options such as restructuring its balance sheet. First Republic Bank plans to shrink its balance sheet and cut expenses by lowering executive compensation, paring back office space. This expenses cut also included laying off nearly 20% to 25% of employees in the second quarter of this year.
The bank also said that it was pursuing strategic options to help expedite progress on strengthening the operation, but did not provide further detail.
Yesterday, Credit Suisse stated on Monday that it saw 61 billion Swiss francs ($68 billion) of outflow in assets in the first quarter of this year, putting pressure on UBS Group AG that recently acquired the bank in a shotgun wedding.
The bank also said that customer deposits declined by 67 billion francs. Meanwhile, a significant number of customers that reached maturing time deposits decided not to renew with the bank.
