Local regulators shuttered the US-based First Republic Bank on Monday (local time) and entered into a deal with JP Morgan Chase Bank to purchase and assume all deposits and assets of the failing bank in order to protect depositors.
“To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank,” US agency Federal Deposit Insurance Corporation said in a statement. JPMorgan Chase Bank, National Association submitted a bid for all of First Republic Bank’s deposits.
As part of the arrangement, First Republic Bank’s 84 offices in eight states will reopen as JPMorgan Chase Bank, National Association branches beginning today. All First Republic Bank depositors will become depositors of JPMorgan Chase Bank, National Association and will have full access to their funds.
“Deposits will continue to be insured by the FDIC, and customers do not need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Republic Bank should continue to use their existing branch until they receive notice from JPMorgan Chase Bank, National Association, that it has completed systems changes to allow other JPMorgan Chase Bank, National Association, branches to process their accounts as well,” FDIC said.
First Republic Bank had around USD 229.1 billion in total assets and USD 103.9 billion in total deposits as of April 13, 2023. JPMorgan Chase Bank agreed to buy “substantially” all of First Republic Bank’s assets in addition to assuming all of the deposits.
Silicon Valley Bank, one of the most renowned lenders in the world of technology startups, first failed on March 10, following a depositor run on the bank. Its closure triggered a chain reaction that resulted in the closure of other institutions, notably First Republic Bank. The failure of a few regional banks in the United States, beginning with Silicon Valley Bank, has sent shockwaves across the global banking system, raising concerns about a contagion impact across economies.
