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JP Morgan Acquires Failed US Bank

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JP Morgan Chase has taken over the troubled US bank First Republic in a deal brokered by regulators.

The Wall Street giant said it would pay $10.6bn (£8.5bn) to the Federal Insurance Deposit Corp (FIDC), after officials shut down the smaller bank.

First Republic had been under pressure since last month, when the collapse of two other US lenders sparked fears about the state of the banking system.

Authorities said they hoped the deal would resolve the panic.

READ ALSO: Four Days That Shook The US Banking System

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The failure of San Francisco-based First Republic is the second-largest in US history and the third in the country since March.

Worth more than $20bn at the beginning of last month, the bank was known for its big home loan business and for its stable of wealthy clients. It was ranked as the 14th largest lender in the US at the end of last year.

The bank’s 84 offices in eight states reopened on Monday as branches of JPMorgan Chase Bank after regulators seized control and sold it to the Wall Street institution.

In a scramble to come up with a rescue package, US officials were understood to have contacted six banks before landing on America’s largest lender, according to news agency AFP.

READ ALSO: FG Bars Online Banks From Accessing Customers’ Photos, Contacts

US President Joe Biden said the actions would ensure that the banking system was “safe and sound”.

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But the deal appeared poised to renew political debate about financial regulation and the power of America’s biggest banks.

The Chief Executive of JP Morgan Chase, Jamie Dimon, said the government had “invited” the banking giant, along with others, to “step up, and we did” and offered assurances about the industry.

“This part of the crisis is over,” he said, noting that few other banks were at risk of customers withdrawing deposits on mass, which caused the problems at First Republic and the two other lenders: Silicon Valley Bank and Signature Bank.

READ ALSO: DMO Defends $13bn Indebtedness To World Bank

“Down the road – rates going up, recession, real estate – that’s a whole different issue. For now, we should take a deep breath,” he added.

Jamie Dimon told reporters on Monday: ‘Hopefully this will help stabilise everything.’

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Fears over the health of the US’s banking system first erupted after the collapse of Silicon Valley Bank (SVB) in March. The demise a few days later of another US lender, Signature Bank sparked panic among investors and bank customers.

US authorities stepped in to guarantee deposits beyond typical limits at SVB and Signature in an effort to head off further runs on bank deposits.

But that did not immediately prevent concerns from spreading.

In Europe, Swiss officials were forced to broker a rescue for troubled banking giant Credit Suisse, which saw 61.2bn Swiss francs ($69bn; £55.2bn) leave the bank in the first three months of the year.

 

 

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JUST IN: CBN Increases Interest Rate To 24.75%

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The Monetary Policy Committee of the Central Bank of Nigeria has today concluded its two-day meeting for March 2024.

This meeting marks the second MPC meeting for the year 2024 and also the 294th meeting of the CBN.

The MPC at the end of today’s meeting elected to hike the MPR by 200 basis points.

The Committee voted as follows: Raise the MPR by 200bps to 24.75 from 22.75 per cent
Increase the asymmetric corridor to +100bps/-300 basic points.

READ ALSO: JUST IN: CBN Sells Forex To BDCs At N1,251/$1

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Retain the Cash Reserve Ratio of Deposit Money Banks at 45 per cent and Adjust the CRR of Merchant banks from 10 per cent to 14 per cent.

The CBN retains a liquidity ratio of 13 per cent.

Details later…

 

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JUST IN: CBN Sells Forex To BDCs At N1,251/$1

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The Central Bank of Nigeria (CBN) has issued a circular to Bureau De Change (BDC) operators informing them that they sold $10,000 to each BDC at a rate of N1,251 per US dollar.

Nairametrics reports that the CBN, in a circular, instructed each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5% above the purchase price.

READ ALSO:Tips For Online Registration Of Prospective Corps Members

It reads: “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.

“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 per cent above the purchase price.”

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Financial Institution Launches Indigenous Micro Insurance Software To Boost Customers Confidence

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The acting Managing Director, Prudent Choice Micro Insurance, Mrs. Gloria Onosolease, has said that the launch of its indigenous micro insurance software, named Insuretech, will help boost customers confidence and ensure accountability in the sector.

She disclosed this during the official launch of its Insuretech software in Benin.

Mrs. Onosolease said the achievement will significantly shape the nascent micro insurance landscape in Nigeria and indeed, across the African continent.

Onosolease said the newly developed software heralds a pivotal advancement in enhancing customer interaction and satisfaction, while concurrently optimizing their internal operations to foster efficiency.

She added that in a fiercely competitive industry such as insurance, embracing technology is indispensable to their continuous success and sustainability.

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READ ALSO: Tips For Online Registration Of Prospective Corps Members

She said that the micro insurance sector in Nigeria, particularly in Edo State, is undergoing a phase of unprecedented growth with a population exceeding five million people where a substantial portion of which is engaged in low income and medium sized enterprises spanning rural, urban and semi-urban areas.

She said due to this, there exists an urgent demand for accessible and inclusive insurance solutions but regrettably, this demographic has long been underserved and marginalized in terms of insurance protection.

She further said that with the launch of Insuretech, it will help mitigate the financial risks encountered by low income earners and small to medium scale enterprises.

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