First Republic: JP Morgan to take over major US bank

Most assets of First Republic Bank are being purchased by JPMorgan Chase in a deal announced Monday that was arranged by the Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers, CNN reports.

JPMorgan Chase said it had acquired the substantial majority of assets and assumed the deposits and certain other liabilities of First Republic Bank from the FDIC.

The FDIC took control of the embattled lender Sunday and then immediately announced a sale of many of its assets and deposits.

First Republic becomes the third major US bank to collapse in recent months.

The San Francisco-based lender’s shares fell by more than 75% last week after it revealed that customers had withdrawn $100bn (£79.6bn) of deposits in March.

It follows on from the collapse of Silicon Valley Bank (SVB) in March, which prompted fears of a wider banking crisis.

That was swiftly followed by the demise of another US lender, Signature Bank.

A deposit flight from US lenders has forced the Federal Reserve, the US central bank, to step in with emergency measures to stabilise financial markets.

In March, a group of 11 US banks stepped forward to pump $30bn into First Republic in a bid to stabilise the business, but the efforts proved futile.

Founded in 1985, First Republic is a mid-sized US lender, similar to SVB. For years, it has lured wealthy clients – whose money was at risk before the takeover was announced after a weekend of negotiations.

The terms of First Republic’s acquisition by JP Morgan are not yet known.

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