The deal, announced earlier Monday by regulators, sees JPMorgan commit $173 billion in loans, $30 billion in securities and $92 billion in deposits from bankrupt lenders, according to the agency. Details of how much JPMorgan will pay under the agreement were not disclosed.
The San Francisco-based First Republic came under intense pressure after it was revealed last week that it had lost more than $100 billion in the first quarter and was exploring bailout options. The news also added pressure on the banking sector, which had weakened since the closure of Silicon Valley Bank and Signature Bank in March, while Swiss lender Credit Suisse was taken over by rival UBS as part of of a planned state takeover. First Republic Bank shares have lost 97% of their value this year. Shares of JP Morgan rose 2.7%.
JPMorgan was one of several interested bidders, including PNC Financial Services Group and Citizens Financial Group Inc, that submitted final offers on Sunday at an auction hosted by U.S. regulators, people familiar with the matter said.
JPMorgan said it expects to generate about $2.6 billion in after-tax profit from the deal, which does not reflect the estimated $2 billion after-tax restructuring costs expected over the course of of the next 18 months. Starting Monday, 84 offices of the bankrupt bank in eight states will reopen as branches of JPMorgan Chase Bank, JPMorgan said in a statement.
Read the Latest Science and Technology News Today on The Eastern Herald.
