Banks that contributed the bulk of $30 billion in deposits to First Republic Bank plan to set aside about $100 million each in first-quarter earnings in case of potential losses, two sources with direct knowledge of the matter said.
JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Bank of America Corp deposited $5 billion apiece in uninsured deposits into First Republic in March to shore up confidence in the industry.
The sources declined to be identified because of the sensitivity of the situation. The banks declined to comment.
The four largest US banks were among a group of 11 lenders that bolstered First Republic after its shares plunged during the crisis triggered by the collapse of Silicon Valley Bank and Signature Bank.
Lenders typically earmark rainy day funds to prepare for soured loans. Major US banks will begin reporting first-quarter earnings from Friday.
News of the planned provisions was reported earlier by Bloomberg.
Wall Street stocks ended mixed on Tuesday, losing steam late in the session as investors awaited crucial inflation data and the unofficial kick-off of first-quarter reporting season.
The Dow closed in positive territory with economically sensitive sectors such as industrials, materials and transports providing a boost, while tech and tech-adjacent megacap stocks pulled the Nasdaq to a lower close. – Reuters
