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JPMorgan Chase acquired First Republic Bank around three weeks ago.
Patrick T. Fallon / AFP via Getty Images
It’s been only three weeks since
JPMorgan
Chase acquired troubled
First Republic Bank
but already it’s seeing potential in the deal that occurred with the government’s encouragement.
JPMorgan (ticker: JPM) expects its net interest income (NII) to increase by $3 billion to $84 billion this year due to the deal, according to slides released ahead of its investor day. Over the medium term, the bank expects NII to be around the mid-$70 billion mark, reflecting an expected drop in interest rates.
Still the bank cautioned that “uncertainty” around deposit pricing and actions by the Federal Reserve—namely, the path of interest rates—could affect its outlook.
Earlier this month, JPMorgan stepped up to acquire much of what was First Republic Bank from the Federal Deposit Insurance Corporation (FDIC), amounting to $173 billion of loans, $30 billion of securities, and $92 billion of deposits. The First Republic business is now being overseen by Marianne Lake and Jennifer Piepszak, co-heads of JPMorgan’s Consumer and Community Banking division and potential successors to Chairman and CEO Jamie Dimon.
JPMorgan has been riding high this year despite the broader tumult in the banking industry. Ahead of its investor day, the bank’s shares were up 9.3% this year, topping the 3.8% gain in the S&P 500 and the 23% drop in the KBW Nasdaq Bank Index (BKX).
JPMorgan executives from each of the bank’s divisions including consumer banking and investment banking are expected to give updates on their respective business lines in Monday’s presentation. Dimon will deliver closing remarks and conduct a question-and-answer session later this afternoon.
Write to Carleton English at [email protected]
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