The fall of the First Republic implied the fourth banking collapse in the United States in less than two months, after those of Silicon Valley Bank (SVB), Slivergate and Signature Bank in March.
JP Morgan bank laid off nearly 1,000 First Republic Bank employees in the United States, less than a month after buying the entity that was on the verge of collapse. to the rest of the 7,000 employees from the bank will be offered permanent or temporary roles for 3 to 12 months.
“Since our purchase of First Republic on May 1, we have been transparent with its employees and have kept our promise to update them on their employment status within 30 days,” a JP Morgan spokesperson said in a statement. In the text, the company acknowledged that employees “have been under a situation of stress and uncertainty since March (last) and we hope that today we will bring you greater clarity.”
According to JP Morgan, laid off employees “will receive their wages and benefits equivalent to sixty days.” It should be noted that before its collapse and subsequent purchase by JP Morgan, First Republic had announced a 25% cut of its plantone of his latest attempts to calm down his investors and his stock price, which had plummeted 97% as a result of the banking turmoil.
Days later, the Federal Deposit Insurance Corporation (FDIC), the regulatory body in charge of guaranteeing bank deposits, announced the seizure and sale of assets to the New York bank for US$10.6 billion. The fall of the First Republic implied the fourth banking collapse in the United States in less than two months, after those of Silicon Valley Bank (SVB), Slivergate and Signature Bank in March, which generated a run on the entire system of small and medium banks.
JP Morgan took over $173 billion in loans, $30 billion in securities and $92 billion in deposits, which were part of the bank’s assets. The FDIC-JP Morgan deal involved “a highly competitive auction process” that the federal agency estimated cost the state “close to $13 billion” in sharing losses with the buyer.
As part of the transaction, First Republic’s 84 branches located in eight states today operate as subsidiaries of JP Morgan.
But what happened with First Republic Bank is not outside of the massive layoffs due to the crisis in the sector. SVB, another bank that collapsed, seized and later sold, was also hit by the layoffs. First Citizens Bancshares, the entity that bought SVB’s assets from the state at the end of March, announced this week the dismissal of 500 employees who were part of the fallen bank.
Source: Ambito
