The second-largest US bank failure ever & the Microsoft of Banking 🤯; Stripe is moving into Adyen’s territory 👀; More banks are becoming crypto banks 🏦
FinTech is Eating the World, 1 May
Hey Everyone,
Happy Monday! I hope you managed to relax over the weekend because we’re starting a new week with a bang 🧨 Today’ we’re going to look at the second-largest US bank failure ever and the Microsoft of Banking (this is a BIG deal!), Stripe that’s moving into Adyen’s territory (this is getting interesting + many bonus reads), and more banks that are becoming crypto banks (what it has to do with Bitpanda?). Let’s jump straight into the interesting stuff 🌶
The second-largest US bank failure ever & the Microsoft of Banking 🤯
The breaking news🚨 First Republic Bank FRC 0.00%↑ was just seized and sold to JPMorgan JPM 0.00%↑ in the second-largest US bank failure ever 🤯
In case you wonder how we got here: Another weekend, another bank is on the brink of collapse 😳
More on this 👉 The FDIC technically avoided another banking crisis by first seizing First Republic and then orchestrating a sale to JPMorgan Chase which took over $103.9 billion in deposits and $229.1 billion in assets from FRB.
JPMorgan now holds more than $2.4 trillion in deposits. To put this into perspective, that's almost the entire market cap of Apple 👀
But… ICYMI: Apple is building JPMorgan 2.0 😳
Also, it’s two times bigger than the total market cap of all cryptocurrencies out there. Wild! 🤯
And that's not even it.
The money 💸 JPMorgan just said its acquisition of First Republic will generate an immediate gain of $2.6 billion and $500 million in yearly profit. Not bad, huh? 😌
On top of all this, the FDIC is covering $13 billion in losses and providing $50 billion in financing.
ICYMI: JPMorgan reports record revenue 🤑
Our government invited us and others to step up, and we did. Our financial strength, capabilities, and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund. (Jamie Dimon, CEO, JPMorgan Chase)
✈️ THE TAKEAWAY
What’s next? 🤔 Following the sale, First Republic's 84 branches in eight states will reopen as JPMorgan Chase sites. This is another masterstroke from Jamie Dimon that further cements JPMorgan as the Microsoft of Banking. Zooming out, this is one among many steps where the big buys will become even bigger while the smaller ones might cease to exist. Buckle up because this might not be over yet.
Bonus: JPMorgan is the Microsoft of Banking 😎 [+ a dive into JPM’s FinTech strategy]