US regulatory authorities have taken control of Californian bank First Republic, which US banking giant JP Morgan Chase is buying, the Federal Deposit Insurance Corporation (FDIC) announced.
The bank has been under heavy pressure since the early March collapse of two similar banks, Silicon Valley Bank and Signature Bank, which regulators took over as wealthy clients worried about the banks’ viability began to withdraw their funds en masse.
Regulatory bodies took control of the California Bank First Republic Bank. They sold all its deposits and most of its assets to the banking giant JP Morgan Chase to prevent further banking disruptions in the US, reports Beta citing the AP agency.
First Republic Bank, based in San Francisco, is the third mid-sized US bank to fail in the past two months. Its investors and customers were concerned about whether it would survive because of its many uninsured deposits and exposure to low-interest loans.
The Federal Deposit Insurance Corporation announced that 84 First Republic Bank branches in eight states will reopen as JP Morgan Chase Bank branches, and depositors will have access to all their funds.
Clients withdrew $100 billion from First Republic Bank in a month
Depositors at First Republic Bank pulled more than $100 billion from the bank during last month’s crisis, as fears spread that it could be the third US banking institution to fail.
The Wall Street Journal reported that San Francisco-based First Republic said Monday that it could only stop excessive outflows after a group of major banks stepped in to bail it out by depositing $30 billion in uninsured deposits.
It said it plans to sell off some assets, restructure its balance sheet, and lay off as much as a quarter of its workforce, which at the end of 2022 was around 7,200. Its shares fell more than 20 percent in after-hours trading on Monday.
