Eleven major US banks have poured a total of $30bn of uninsured deposits into embattled private bank and wealth management First Republic Bank to avert panic in the nation’s financial system.  

The infusion is aimed at helping stabilise the bank, which has been reeling from a crisis caused by the failure of Silicon Valley Bank (SVB) and Signature Bank last week.

A Bloomberg report stated that First Republic Bank is considering strategic options including a sale to boost its liquidity.

Among First Republic’s rescuers include Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, with each contributing $5bn in uninsured deposits.

Goldman Sachs and Morgan Stanley are injecting $2.5bn each, while BNY-Mellon, PNC Bank, State Street, Truist and US Bank are providing $1bn each.

In a joint statement, the banks said: “This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities. 

“Regional, midsize and small banks are critical to the health and functioning of our financial system.”

The banks also noted that the collapse of SVB and Signature Bank have triggered outflows of uninsured deposits at a few banks.

First Republic Bank founder and executive chairman Jim Herbert and CEO and president Mike Roffler said: “We would like to share our deep appreciation for Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank.

“Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire US banking system.”

Until 15 March 2023, the bank had a cash position of around $34bn, which excludes the latest rescue package.

The bank further said that it aims to minimise its borrowings and has paused its dividend payout.