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  • 01-05-23

    JPMorgan Acquires First Republic Bank in Third Major US Bank Failure

    (MENAFN) In a recent development, US regulators announced that First Republic Bank has been seized and sold to JPMorgan Chase & Co, marking the third major US institution to fail within the past two months. As per the regulatory statement, JPMorgan will take over most of First Republic's assets and all its deposits, including uninsured ones.

    The sale of First Republic was conducted through an auction that saw several interested buyers, including PNC Financial Services Group and Citizens Financial Group Inc. However, JPMorgan emerged as the successful bidder, and the deal was finalized on Sunday, as per sources familiar with the matter.

    The California Department of Financial Protection and Innovation stated early on Monday that it had taken possession of First Republic, and the Federal Deposit Insurance Corp. (FDIC) would act as its receiver. The FDIC has estimated that the cost to the Deposit Insurance Fund would be around USD13 billion, but the final cost will be determined when the FDIC terminates the receivership.

    According to the FDIC statement, First Republic had total assets worth USD229.1 billion as of April 13 and USD103.9 billion worth of deposits. This seizure and sale of First Republic Bank highlight the growing concerns over the stability of US financial institutions amidst the ongoing economic turmoil caused by the COVID-19 pandemic.

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