J.P. Morgan Chase & Co. is buying the troubled First Republic Bank of the United States. US regulators said the bank had been seized and an agreement had been reached that JPMorgan would buy the bank. With this, in the last two months, a third bank in the United States collapsed. News: CNN’s.
JP Morgan is not taking everything from First Republic. They are responsible for First Republic’s $173 billion or $17,300 million in debt, $30 billion or $3,000 million in securities and $92 billion or $9,000 million in deposits.
They will not acquire First Republic’s corporate debt and certain stocks.
However, First Republic Bank was also profitable in the first quarter of this year. However, the bank reported only $269 million in revenue in the first quarter, down 33 percent from last year.
The real problem starts later. Investors and the US financial authorities gradually lost confidence in the news of the bailout of customers.
63 percent of First Republic Bank’s customers were businesses and the rest were individuals.
Silicon Valley Bank recently went bankrupt. Prior to this, bank bankruptcies in the United States were few and far between. Not in 2021 or 2022.
In 2017, Guaranty Bank in Milwaukee, which had a billion in assets, went bankrupt.
In 2008, the 100 billion dollar bank named ‘Washington Mutual’ went bankrupt. The bank’s assets were $307 billion. This is the biggest bank failure in US history.