View more on these topics

JPMorgan snaps up WaMu for $1.9bn

JPMorgan Chase has bought US credit union Washington Mutual for $1.9bn.

The bank has already come to the rescue of one failed US firm in 2008. In March it saved investment giant Bear Stearns from going under when it agreed to purchase it for $1.2bn.

WaMu had put itself up for sale on September 18 on the back of losses of $6.3bn over the last three quarters.

But the deal between WaMu and JPMorgan Chase was actually made possible by the Federal Deposit Insurance Corporation after it seized the failing credit union’s assets and shut it down.

The FDIC then brokered the deal with JPMorgan Chase to sell off WaMu’s deposits and branches.

The FDIC was set up in 1933 in the wake of the Great Depression to restore confidence in the US’ banking system.

Sheila Bair, chairman of the FDIC, says: “”For all depositors and other customers of WaMu, this is simply a combination of two banks.”

“For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning.”

JPMorgan Chase says it will be marking down WaMu’s loan portfolio to the tune of $31bn.

This represents JPMorgan Chase’s estimate of remaining credit losses related to impaired loans.

It intends to raise additional capital in connection with this transaction to maintain the company’s strong capital position.

The merger will create the largest US depository institution, with over $900bn of customer deposits.

Jamie Dimon, chairman and CEO of JPMorgan Chase, says: “This deal makes excellent strategic sense for our company and our shareholders.

“Our people have worked hard to build a strong franchise and balance sheet – making this compelling transaction possible.

“As we have said in the past, increasing our regional banking presence not only strengthens our retail business, but also benefits other business lines across our firm, including our commercial banking, business banking, credit card, and asset management groups.”

“We look forward to welcoming WaMu’s employees to JPMorgan Chase and working with them as we build a great company together.”


Tougher regulation needed says Darling

The chancellor Alistair Darling says the events of the last couple of months have proven that the UK financial sector now needs tougher regulation.

Equity release thriving in crunch

The housing market is slowing, new mortgage volumes are falling – it’s a story we are familiar with, but the equity release market is thriving. Safe Home Income Plan’s Q2 figures, which came out this week, demonstrate how equity release is resisting the credit crunch with a 14% increase in business – an encouraging scenario considering the current economic climate.

Market Watch 22/09/08

Swaps fell again last week. Most of the falls seemed to follow the weekend’s announcements about Lehman Brothers and Merrill Lynch.

Paragon shuns takeover bid

Buy-to-let specialist Paragon Group last week turned down a £373m takeover bid.

A guide to auction finance in 2017

By Matt Tooth, chief commercial officer, LendInvest Over the coming weeks, property auction houses across the country will begin sending out their catalogues to prospective buyers in time for the first auction series of 2017. It’s an exciting time for investors, well aware of the opportunities the properties on the lot sheets offer them and […]


News and expert analysis straight to your inbox

Sign up