First Republic Bank was a commercial bank that, as of May 1, 2023, was closed and sold to JPMorgan Chase. Here’s everything you need to know about banking.
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Saumya Updated: May 2, 2023 12:37 IST
All you need to know about First Republic Bank
Following the collapse of Silicon Valley Bank (SVB) and Signature Bank, the sale of First Republic Bank marks the bankruptcy of the third largest bank in the United States. FRB was taken over by the Federal Deposit Insurance Corporation (FDIC), which took control of the bidding, and a large portion of its assets were sold to the largest lender in the US.
In a press release, JPM said that it “is supporting the U.S. financial system through its significant strength and enforcement capabilities. As part of the purchase, JPMorgan Chase will assume all deposits – insured and uninsured.”
All you need to know about First Republic Bank
- First Republic Bank is a publicly traded bank founded in 1985 and headquartered in San Francisco, California.
- The bank provides personal and corporate banking, personal wealth management, investment management and fiduciary services to high net worth individuals and businesses.
- Its primary focus is to provide personalized banking services to high net worth individuals and businesses. This includes providing customized lending solutions, investment management services and fiduciary services.
- It has 85 offices located in major metropolitan areas in the United States, including California, New York, Boston, Florida and Oregon.
- It consistently receives high ratings from third-party rating agencies. For example, it has been ranked as “Best Private Bank in North America” and “Top Family Bank.”
- The banking crisis is now believed to be the second largest bank failure in American history.
BREAKING: JP Morgan Chase will acquire the majority of assets of First Republic Bank following a deal arranged by the FDIC this morning.
Detail:
– First Republic Bank became the third bank to go bankrupt since March.
– 84 offices of First Republic Bank will reopen as branches of… pic.twitter.com/kITZJoS1VD
– Brian Krassenstein (@krassenstein)
May 1, 2023
Crisis
- The US banking system has been in turmoil since the collapse of SVB and Signature Bank. In the last week of April, First Republic Bank revealed that it had lost about $100 billion in deposits in just three months, and that’s when the trouble began.
- The bank’s shares have fallen more than 97%. The New York Stock Exchange (NYSE) has even had to stop trading stocks many times.
- Following the failure of two major banks, regulators began identifying other banks that might face such a crisis, and First Republic Bank was one of them.
- The bank tried to sell itself to recover its losses but it was all in vain.
- Then the government took over. The FDIC called on various banks to consider making bids, and JPMorgan Chase won.
- US President Joe Biden welcomed the purchase and expected it to create a “safe banking environment” in the country.
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84 branches of the bank were opened as branches of JPMorgan Chase Bank. The situation is now much calmer as the outflow of remittances has stabilized. It remains to be seen whether the bank will regain its former glory.
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Source: pagasa.edu.vn