The US bank First Republic, which was struggling because of the banking crisis, is being taken over by the financial group JP Morgan Chase. First, the US deposit insurance FDIC trustee of the institute, as the California financial regulator DFPI announced. In the next step, JP Morgan will take over First Republic with all deposits and practically all assets. According to insiders, half a dozen banks participated in the bidding process for First Republic, including Citizens Financial and PNC Financial Services.
Shares in First Republic Bank were temporarily suspended from trading on Friday after falling more than 50 percent to a record low. Since the collapse of Silicon Valley Bank and Signature Bank, the money house has been struggling with the fact that many customers have withdrawn their money. The background to the problems was the sudden rise in key interest rates. Despite an aid campaign by the largest US financial institutions in coordination with the Treasury Department and the Federal Reserve, the situation remained precarious.
In a concerted effort, major banks initially poured $30 billion into First Republic Bank to bail it out. Earlier last week, however, the First Republic disclosed a deposit outflow of more than $100 billion in the first quarter. It was announced on Friday that the FDIC had identified a further deterioration in the bank’s situation and had launched a new bailout.