First Republic Bank to cut up to 25% workforce as deposits tumble

San Francisco-headquartered First Republic Bank is slashing its workforce by up to 25 per cent, reflecting wider after-effects of March's Silicon Valley Bank crisisin the United States. The customer deposits decreased by a whopping 41 per cent to $104.5 billion in the first quarter missing its $137 billion target, Bloomberg reported.

In response to the "unprecedented" outflow of deposits, the company, other than layoffs, is also weighingunspecified strategic options as it works to reinforce its dominantposition in the United States.

Between the end of March and April 21, deposits slipped just 1.7 per cent. This, the company said, means that thecustomer activity has largely been stable.

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"Though we faced challenges and uncertainties with the stabilization of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business,"Chief Executive Officer Mike Roffler is reported to have said on a conference call.

The company has retained 90 per centof its wealth professionals and remains "fully committed" to the business, Roffler added.

The company said that theuninsured deposits would remain a smaller part of its total deposit base. It also plans to moderate loan volumes and will now focus on originating loans that can be sold on the secondary market.

"We intend to retain servicing on these loans as we always have so that we remain the primary point of contact for our clients,"Roffler said on the call. "Through these actions we intend to reduce the size of our balance sheet, reduce our reliance on short-term borrowings and address the challenges we continue to face."

First Republic shares fell 12 per centin late New York trading.

What is happening at the First Republic Bank?

Last month,the United States government took the "receivership" ofthe collapsed Silicon Valley Bank,after a sale of available-for-sale securities stokes a massive outflow of the depositors.

The crisis put a spotlight on banks sitting on large piles of unrealised and often unreportedlosses on their balance sheets, First Republic Bank one amongstthem.

ALSO WATCH |Regulators help First Republic Bank get a $30 billion bailout

Bloomberg reported that the First Bank executives considered a sale of the entire bank. The large unrealised losses have caused some buyers to not consider a buyout of the bank at all, the report added.

Founded in 1985, First Republic has expanded its wealth-management services and related offerings for the ultra-rich over the decades.

But in recent weeks, a number of itsadvisers have left for the rivals, Bloomberg reported.

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