The actions of JP Morganthe largest bank in the United States by the size of its assets, fell 2.9% a week after they confirmed the purchase of the assets of the First Republic Bank, disposed of by the federal government of that country.
In market value, the company has lost more than 12.069 million dollars in six days of operations, closing this Monday with 400.558 million dollars.
“Here the issue is that by incurring in this purchase the capital and debt needs increased, therefore, in the event of carrying out a new capital issue, the current value of its titles will be diluted,” explained Manuel Zegbe, senior analyst at Signum Research.
One day after announcing the purchase, its titles fell 1.61% on the NYSE, went from 141.2 to 138.92 dollars per unit. The decline was extended for two more days until Thursday, May 4, and it closed that day’s trading at $134.12 per share.
On Friday, May 5 and this Monday, all the banks listed in the NYSE experienced a rebound in the price of their securities.
This Monday the actions of JP Morgan they closed with a slight advance of 0.24% at 137.07 dollars per unit, still below the 141.2 dollars of a week ago.
Until December 31 of last year, the assets of JP Morgan they were valued at 3.2 trillion dollars, according to data from the United States Federal Reserve.
With the purchase operation, the bank would integrate the deposits of the First Republic Bank with a value of 93,500 million dollars. JP Morgan would pay $10.6 billion to the Federal Deposit Insurance Corporation (FDIC).
“It should be noted that it has not been mentioned how or with what resources JP Morgan will buy the bank’s liabilities”, added Manuel Zegbe.
Banks toughen credit criteria
On Monday, the Senior Loan Officer Opinion Survey (SLOOS) was published, revealing that banks have toughened their criteria for granting credit.
Gabriela Siller, director of economic analysis at Banco Base, explained that financial institutions have lowered their credit offer due to factors such as economic uncertainty, higher funding costs, greater risk aversion and deterioration in the value of collateral assets.
“There is concern in small and medium-sized banks regarding their liquidity and the withdrawal of deposits, something that has caused the collapse of several regional banks in recent months,” added Siller.
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