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WORLD> America
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JPMorgan to buy Washington Mutual deposits
(Agencies)
Updated: 2008-09-26 10:56 NEW YORK -- JPMorgan Chase & Co is expected to acquire the deposits of Washington Mutual Inc, the largest US savings and loan, in a government-brokered bailout, the Wall Street Journal reported on Thursday.
The purchase could be a major step in cleaning up a US financial system littered with toxic mortgage debt. Acquiring the deposits could fulfill JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail banking force in the western United States. It comes six months after JPMorgan, the No. 3 US bank, agreed to acquire the failing investment bank Bear Stearns Cos at a fire-sale price. Branches would also be included in the transaction, the newspaper said. JPMorgan said it would hold an investor conference call on Thursday, but it did not say why. Neither company returned calls for comment. The deposit acquisition is not likely to affect the roughly $45.2 billion insurance fund of the Federal Deposit Insurance Corp (FDIC), which analysts expect will be tapped dozens of times in the next few years to cover bank failures. It also comes as Washington wrangles over the fate of a $700 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions. "Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine." JPMorgan ended June with $1.78 trillion of assets, $722.9 billion of deposits and 3,157 branches. Washington Mutual ended June with $309.7 billion of assets, $181.9 billion of deposits, 2,239 branches and 43,198 employees. Shares of Washington Mutual plunged 80 cents to 89 cents in after-hours trading after falling 57 cents to $1.69 in regular trading on the New York Stock Exchange. |
