JP Morgan Chase snaps up troubled First Republic from FDIC in $10.6bn deal
US multinational JP Morgan Chase has taken over beleaguered First Republic Bank from the US Federal Deposit Insurance Corporation (FDIC).
JP Morgan Chase snaps up First Republic Bank
JP Morgan Chase has assumed all deposits – insured and uninsured – worth approximately $92 billion, including $30 billion of large bank deposits. Branches reopened and normal services resumed on Monday, 1 May.
The bank will pay $10.6 billion to the FDIC, BBC News reports.
“In carrying out this transaction, JP Morgan Chase is supporting the US financial system through its significant strength and execution capabilities,” the firm says, minimising the cost to the FDIC through a competitive bid process.
The FDIC estimates that the cost to the Deposit Insurance Fund will be about $13 billion.
JP Morgan Chase CEO and chair Jamie Dimon says: “This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”
Deposits will continue to be insured by the FDIC and the deal also sees JP Morgan Chase acquire approximately $173 billion of loans and approximately $30 billion of securities, but not First Republic’s corporate debt or preferred stock.
The acquired First Republic business will be overseen by JP Morgan Chase’s consumer and community banking arm.
The recent failure of the San Francisco-based bank follows hot on the heels of Silicon Valley Bank and Signature Bank and represents the second-largest bank collapse in US history.
