First Republic makes last ditch bid to find rescue deal

US regulators are racing to find a rescuer to buy First Republic Bank in a deal that could be announced as soon as Sunday.

The Federal Deposit Insurance Corporation has reportedly asked six banks to bid for the embattled lender.

Shares in First Republic plunged last week after it admitted customers had withdrawn $100bn in deposits in March.

At that time, its competitor Silicon Valley Bank had collapsed, prompting fears of a wider banking crisis.

SVB's failure was swiftly followed by the demise of another US lender, Signature Bank.

According to reports, the Federal Deposit Insurance Corporation (FDIC), a US financial regulator, sought bids for First Republic by the end of last week and has been assessing them over the weekend.

Investment banking giant JP Morgan Chase is believed to be one of the banks invited to bid for First Republic, according to news agency Reuters. Bank of America is also understood to have been approached.

JP Morgan and Bank of America declined to comment. The FDIC has been contacted for comment.

Concerns about the global banking industry gathered pace last month as problems at Silicon Valley Bank emerged.

Central banks around the world have been sharply raising interest rates over the past year to dampen the rate of price rises, otherwise known as inflation.

It has hurt the values of the large portfolios of bonds bought by banks when rates were lower, raising concerns that other firms faced similar situations.

At the same time in Europe, Swiss banking giant Credit Suisse - which had been engulfed in its own problems for a number of years - said it would have to borrow $54bn from the country's central bank to shore up its finances.

Credit Suisse has since been rescued by long-time rival UBS.

Like Silicon Valley Bank, First Republic is a mid-sized US lender. In March, a group of 11 US banks stepped forward to pump $30bn into First Republic in an attempt to stabilise the business. They included JP Morgan.

However, investors in the bank were rattled last week when First Republic disclosed the amount that depositors had pulled from the lender in March.

First Republic counts wealthy individuals among its clients whose money is potentially at risk if a buyer is not found. In the US, the FDIC insures deposits up to $250,000.

When Silicon Valley Bank and Signature collapsed, the FDIC stepped in to say it would guarantee all deposits to prevent a rush of people trying to get their money out, which is known as a run on a bank.

If it is not able to find a buyer for First Republic, the FDIC could take similar actions.