JPMorgan, Morgan Stanley among banks in deal talks with First Republic

Several banks including JPMorgan Chase & Co and Morgan Stanley are in talks with First Republic Bank for a potential deal, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

The deal could involve capital infusion to bolster the troubled lender after the collapse of SVB Financial last week triggered fears of a contagion, the report said, adding that a full takeover is also a possibility, though less certain.

First Republic shares were down nearly 17% at $26.08 before being halted.

Other big banks involved in deal talks include Citigroup Inc , Bank of America Corp, Wells Fargo and Goldman Sachs Group Inc, according to the report.

JPMorgan did not immediately respond to a Reuters request for comment, while Morgan Stanley and First Republic declined to comment.
 

The rescue is being orchestrated by the U.S. government, Bloomberg News reported on Thursday, citing people with knowledge of the matter.
 

A deal could be announced as early as Thursday, both the reports said.
 

First Republic has been scrambling for additional sources of funding to stay afloat. On Sunday, the California-based lender raised capital from JPMorgan and said it was able to meet withdrawal requests.
 

That, however, has failed to calm jittery investors. On Wednesday, ratings agency Fitch downgraded First Republic, citing risks to its liquidity.
 

(Reporting by Niket Nishant in Bengaluru; Editing by Vinay Dwivedi and Shounak Dasgupta)