JP Morgan Advises First Republic on ‘Strategic Alternatives’

subject to review, such as capital gains and sales
WSJ CEO Dimon leads the discussion

(New York = Yonhap Infomax) Reporter Youngsook Yoon = JP Morgan Chase is advising on a strategic alternative to First Republic Bank San Francisco (NYS:FRC), CNBC reported on the 20th (local time).

First Republic Bank Branch ATM in California[연합뉴스 자료사진]

Citing sources, the media said that strategic alternatives could include increasing and selling capital.

The Wall Street Journal (WSJ) reported on this day that the CEO of JP Morgan, Jamie Dimon, is leading discussions with other major bank executives to stabilize the First Republic.

Sources said the discussions, although preliminary, focused on how to raise investments that could raise the capital of the First Republic.

Among other options, banks could invest directly in the First Republic.

Last week, 11 of the largest US banks agreed to deposit $30 billion in the First Republic. This comes as liquidity concerns arise for the First Republic as its customers withdrew $70 billion following the collapse of Silicon Valley Bank (SVB) earlier this month.

Accordingly, major banks are also considering converting some or all of the previously deposited $30 billion into capital for the First Republic. In addition, sales or external capital raising are also subject to review.

The WSJ said the situation is still volatile.

Dimon and other bank executives are struggling to instill trust in the banking system.

Dimon, along with federal authorities, led an outreach effort for the First Republic last week.

JP Morgan has a precedent of taking the lead in making a breakthrough in a crisis situation. It acquired Bear Stearns when Bear Stearns went bankrupt in 2008, and later acquired the Washington Mutual division when Washington Mutual went bankrupt.

This article was submitted at 03:00, 2 hours earlier on the Infomax financial information terminal.

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