Citi (C) CEO Jane Fraser says JPMorgan's (JPM) purchase of First Republic Bank (FRC) should help to calm markets.
"I have to say there's a palpable sense of relief from everybody this morning because it's sad to see a bank fail, for sure," Fraser told Yahoo Finance Live at the 2023 Milken Institute Global Conference (video above) on Monday. "This was the last remaining main uncertainty of the small handful of banks that did not do a good job with asset liability management and also were the victim of the steepest rate curve increase you've seen in 40 years."
"As we look at the overall US banking system, this is a strong [system], this is a safe [system], this is the envy of the world," Fraser added.
Fraser remains focused on continuing to transform her global bank against the backdrop of competitor JPMorgan getting even larger with the acquisition of stricken First Republic.
Regulators seized regional bank First Republic early on Monday and sold a majority of the bank's operations to JPMorgan. It marks the largest bank failure since the 2008 financial crisis, Yahoo Finance's David Hollerith reported.
For JPMorgan, the crisis purchase is nothing new: The bank scooped up Washington Mutual and Bear Stearns at the height of the Great Financial Crisis more than a decade ago.
JPMorgan agreed to assume $173 billion in assets, $30 billion in securities, and all of First Republic's $92 billion in deposits.
First Republic will bolster JPMorgan's presence in wealth management, an area Citi has also targeted as ripe for opportunity.
"I think you're seeing...different banks playing different roles," Fraser said. "There's a tendency to think about the large banks only in the domestic context. We play a critical role globally. Our own institution moves $4 trillion of volume daily — that's the GDP of Germany daily — for 5,000 multinational companies around the world."
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email [email protected]
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