However, shares in the San Francisco-based bank fell by more than 75% last week after it revealed customers had withdrawn $100bn of deposits in March. Growing anxiety about the health of the US banking sector has forced the Federal Reserve to launch emergency measures to stabilise the markets.Ī group of 11 Wall Street banks had pumped $30bn into First Republic last month in an attempt to avoid the third bank failure of 2023. 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.”įirst Republic, which focused on high-net-worth clients, got into financial difficulty after customers began pulling deposits from any US lender perceived as weak, after the SVB collapse. Under the terms of the First Republic deal, JP Morgan will acquire all of the California-based bank’s deposits and “substantially all of the assets”, winning out over as many as five rivals reportedly in the running.ĭimon said: “Our government invited us and others to step up, and we did. However, he conceded that if the US economy went into recession and high interest rates persisted, that could lead to “other cracks in the system”. The sequence has prompted concerns about a repeat of the contagion that characterised the global banking crisis.ĭimon said conditions were “nothing like 20 for a lot of different reasons”. The failure of First Republic follows that of Silicon Valley Bank (SVB) and Signature Bank. He said the US banking system was “extraordinarily sound”, adding that the takeover meant the sector was “getting near the end” of the spate of bank collapses and would “hopefully help stabilise everything”. Speaking on a conference call, Dimon played down any other similarities with the 2008 crash, which triggered the start of an international financial crisis that plunged the global economy into recession. The regulator is providing $50bn of financing and promising to share loan losses, as part of a deal that further cements JP Morgan’s position as the largest lender in the US.įirst Republic’s failure is the second largest in US banking history, beaten only by the 2008 demise of Washington Mutual – which was also seized by the FDIC and sold to JP Morgan.

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