He American bank JP Morgan Chase won the tender to buy the bankrupt’s assets Bank of the First Republic (FRB)one of the victims of the March banking crisis in the US and in which many of its clients withdrew deposits, reported the Federal Deposit Insurance Corporation (FDIC) from this country.
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The FDIC, an independent US federal agency for insurance, informed in a statement that the agreement between the two entities was closed in the last few hours, and that «JP Morgan Chase Bank will assume all deposits and substantially all assets of First Republic Bank».
As part of the transaction, First Republic’s 84 offices in eight states will reopen today as branches of JP Morgan Chase.
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«All First Republic Bank depositors were changed to JP Morgan Chase Bank depositors.»says an FDIC statement.
As of April 13, First Republic Bank had approximately $229.1 billion in total assets and another $103.9 billion in total deposits.
FRB currently has about $173 billion in loans, $30 billion in securities and $92 billion in deposits, which «will continue to be FDIC-insured.»
For his part, the CEO of JP Morgan Chase, Jamie DimonHe highlighted in a press release the financial strength of the bank he presides over, which allowed them to «develop an offer to carry out the transaction so as to minimize the costs for the Deposit Guarantee Fund.»
«Customers do not need to change their banking relationship to maintain their deposit insurance coverage up to the applicable limits,» the US federal agency also indicates.
It also reports that this agency and the purchasing bank have initiated «a shared loss transaction on single-family, residential, and commercial loans that they purchased from the old Bank of the First Republic«.
The FDIC as trustee and JP Morgan Chase Bank will share losses and potential recoveries on loans covered by that loss-sharing agreement, and through that process «maximize recovery of assets by keeping them in the private sector.»
The US federal agency also indicates that the sale of First Republic to the largest bank in the country «involved a highly competitive bidding process and resulted in a transaction consistent with the minimum cost requirements of Federal Law Deposit Insurance».
According to FDIC calculations, the estimated cost of the operation for this agency «will be approximately $13 billion,» although the final figure will be determined when this insurance fund ends its receivership.
In electronic operations prior to the opening of the New York Stock Exchange, the shares of the First Republic were trading at $3.51, representing a decrease of 43.30%, while the titles of JP Morgan Chase progressed 0 .87% to settle at $138.24.
EFE