Washington (EFE).- The US bank JPMorgan Chas has won the tender to buy the assets of the bankrupt First Republic Bank (FRB), one of the victims of the banking crisis in March in the US and in which many of its customers withdrew their deposits, reports today the Federal Deposit Insurance Corporation (FDIC) of this country.
The FDIC, an independent US federal agency for insurance, reported in a statement that the agreement between the two entities was closed in the last few hours, and that “JPMorgan 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 JPMorgan Chase.
“All First Republic Bank depositors will become JPMorgan Chase Bank depositors,” the FDIC statement said.
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.”
JPMorgan Chase conveys peace of mind to First Republic clients
For his part, the executive director of JPMorgan Chase, Jamie Dimon, highlighted in a press release the financial strength of the bank he chairs, which allowed them to “develop an offer to execute the transaction in a way that minimizes 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 the agency and the purchasing bank have initiated “a shared loss transaction on single-family, residential, and commercial loans that it purchased from the former First Republic Bank.”
The FDIC as trustee and JPMorgan Chase Bank will share the losses and possible recoveries of the loans covered by that loss-sharing agreement, and that through that process “maximize the recovery of the 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 the Federal Deposit Insurance Act.”
According to FDIC calculations, the estimated cost of the operation for this body “will be approximately 13,000 million dollars”, although the final figure will be determined when this insurance fund ends the receivership.