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U.S. bank stocks turn green on report that Morgan Stanley, JPMorgan may help ailing First Republic raise capital

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3 years ago

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Stocks move into positive territory on report of a potential capital infusion for First Republic, as the health of the U.S. banking sector remains in focus. U.S. bank stocks reversed course and rose Thursday after a report surfaced of a possible capital infusion in the works for First Republic Bank and Treasury Secretary Janet Yellen praised the strength of the financial system. The Wall Street Journal reported that Morgan Stanley, JPMorgan Chase & Co. and others are considering ways to provide financial support for First Republic Bank (FRC). Meanwhile, U.S. Treasury Secretary Janet Yellen plans to tell senators today that the U.S. banking system is on solid footing and that Americans can be confident about their deposits, according to prepared testimony for her appearance before the Senate Finance Committee.

Former Treasury Secretary Larry Summers told CNN that the current situation is not another global financial crisis like the one that shook the world after Lehman Brothers collapsed nearly 15 years ago. “I don’t think this is a time for panic or alarm,” Summers said. “This is not 2008, where people needed to be worried about whether they could get their money from the ATM machine. It absolutely is not that.” First Republic (FRC) tumbled another 20%. Reports surfaced it’s exploring its strategic options, including a potential sale of the company. The stock fell below its all-time low of $22.48 but then rose off its lows after the The Wall Street Journal report. Concerns around the bank’s solvency continue to swirl in the wake of the failures of Silicon Valley Bank, Signature Bank and Silvergate Bank in the past week. At last check, First Republic has fallen 77% in the past week.

In midday action Thursday, JPMorgan Chase & Co. (JPM) rose 1.5%, Morgan Stanley (MS) gained 2.1% and Citigroup Inc. (C) moved higher by 0.9%. Bank of America Corp. (BAC) advanced by 1.4% and Wells Fargo & Co. (WFC) rose 1.3%. Meanwhile, Credit Suisse Group’s (CSGN.EB) stock rose 3.2% after it said it lined up $54 billion in credit from the Swiss National Bank. Goldman Sachs Group Inc. (GS) rose by 0.6%. The Wall Street Journal reported that Goldman Sachs had underestimated the danger that a proposed $2.25 billion capital raise at Silicon Valley Bank could spark a crisis of confidence and a further run on deposits. SVB went out of business on Friday, sparking widespread concerns in the sector.

Meanwhile, David Konrad, the managing director of KBW, said Thursday that the failures of Silicon Valley Bank, Silvergate Bank and Signature Bank in the past week are likely to result in increased regulations over time that may in turn affect industry profitability. Sen. Elizabeth Warren on Wednesday reiterated her criticism of the 2018 easing of Dodd-Frank rules for small and midsize banks and joined with dozens of fellow Democratic lawmakers to introduce a bill that would scrap that rollback. Western Alliance Bancorp’s stock fell 9.8% after credit-rating agency Fitch Ratings placed the company’s debt and deposit ratings on rating watch negative. Fitch analysts said current market conditions “have created liquidity stresses outside the baseline assumptions.” The ratings agency said it’s considering the assignment of a negative or stable outlook for the bank depending on market conditions and the impact on the bank’s deposit franchise, long-term earning power and capitalisation.

Fitch noted that Western Alliance Bancorp reported cash reserves of $25 billion in a March 13 filing. The company’s cash is equivalent to about 47% of total deposits reported as of Dec. 31. The bank also “communicated moderate deposit outflows and insured deposits in excess of 50% of total deposits,” Fitch said. The ratings agency also said the Federal Reserve’s new Bank Term Funding Program “provides a further liquidity backstop at favourable terms” for Western Alliance. This program, set up after the collapse of two U.S. banks last week, could see up to $2 trillion of use, according to a new analysis by JPMorgan. JPMorgan analyst Nikolaos Panigirtzoglou said six regional banks on their own have a combined $460 billion of uninsured deposits. Some $2 trillion is the par amount of bonds held by U.S. banks outside the five largest.

Charles Schwab Corp. (SCHW) dropped by 1.6%. Executives and directors at Schwab bought nearly $7 million worth of the financial-services company’s beaten-down stock Tuesday and Wednesday in an apparent vote of confidence in the company’s ability to weather the ongoing bank rout. Jefferies analyst Ken Usdin said in a note to clients Thursday that he had met with Citigroup Chief Financial Officer Mark Mason and that the company remains in a strong position despite a more uncertain operating environment. Citi is sticking to its target for a return on average tangible common shareholders’ equity (ROTCE) of 11% to 12%, he said. ROTCE is calculated by dividing net earnings applicable to common shareholders by average monthly tangible common shareholders’ equity. Citi continues to benefit from high capital levels, ample liquidity and “sticky” operational deposits, Usdin said.

“While Citi is mindful of the more uncertain operating environment and current volatility, the bank’s overall strategic plan is intact, including its divestiture strategy, growth priorities, and cost reduction plans,” Usdin said. The KBW Nasdaq Bank Index rose 0.8% and the Financial Select Sector SPDR exchange-traded fund (XLF) moved up by 1.5%. Also read New Fed bank facility could see up to $2 trillion of usage, JPMorgan analysts say. MarketWatch

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Economy

Nigeria champions African-Arab trade to boost agribusiness, industrial growth

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1 day ago

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December 5, 2025

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The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.

The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.

The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.

He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.

“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”

Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”

The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.

With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.

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Economy

FEC approves 2026–2028 MTEF, projects N34.33trn revenue 

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2 days ago

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December 4, 2025

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Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.

The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.

He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.

Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.

The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.

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Economy

CBN hikes interest on treasury Bills above inflation rate

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2 days ago

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December 4, 2025

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The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%. 

The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.

Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.

The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.

Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.

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