Chapter 609 Washington Mutual Bank

"Your Highness, after Washington Mutual Bank was taken over by the Federal Deposit Insurance Corporation on the 24th, JPMorgan Chase is actively negotiating with the other party to acquire most of Washington Mutual Bank's assets..."

Zhang Junning said softly to Barron:

"In order to complete this acquisition, JPMorgan Chase hopes to obtain at least $5 billion in financing. They took the initiative to convey this intention to the BFT Fund. Half an hour ago, Mr. Duane Hearst called to ask for your opinion."

"Okay, I will call him back immediately."

"Then I'll go out first, Your Highness."

If Zhang Junning knew that her boss was a British aristocrat with amazing wealth before becoming Barron's personal assistant, then now, as Zhang Junning is around Barron and is exposed to more and more information, her awe of Barron is getting stronger and stronger.

You know, Morgan Stanley, Merrill Lynch, and JPMorgan Chase, before this, Zhang Junning knew what these names meant. They are old companies at the top of the food chain in the global financial system.

Now, with Barron's simple words, they are either acquired or held...

This feeling, the most thrilling thing is not only the transactions involving billions or tens of billions of dollars, but also the experience of participating in major events that are enough to be written into history.

The reason why Zhang Junning had to convey the call from Duane Hurst, CEO of BFT Fund, to Barron was because they were now on the plane to China.

Entering August, the Beijing Olympics is about to open, and Barron will leave from New York and go to China.

It is worth mentioning that he went to China together with Fan Bingbing after he met up with him. Fan Bingbing came to the United States half a month ago to reshoot some shots of the second season of "Succession" and participated in some related activities.

Because they were on the plane, and Barron was resting in his bedroom before, in order not to be disturbed, all calls would be answered by assistant Zhang Junning first.

"It's me, Duane, about JPMorgan Chase..."

Barron quickly dialed Duane Hurst's phone.

After acquiring the branches and assets of Merrill Lynch and IndyMac Bank, Standard Chartered Bank did not participate in the competition for Washington Mutual Bank's assets.

After all, integrating Merrill Lynch Industrial Bank and IndyMac Bank into Standard Chartered Bank's system is already a challenge they need to face.

Not to mention the overlap between various banking institutions, the previous acquisition of Merrill Lynch has not yet received final approval from US regulators, and Standard Chartered Bank does not need to make more trouble now.

Washington Mutual Bank is headquartered in Seattle and is the largest savings bank in the United States, with $307 billion in assets and $188 billion in deposits.

Its assets are far higher than those of Continental Illinois National Bank, which was closed in 1984, and IndyMac Bank, which was taken over by the government earlier this year - so the collapse of Washington Mutual Bank is the largest bank bankruptcy case in the United States to date.

After Washington Mutual Bank was taken over by the Federal Deposit Insurance Corporation, JPMorgan Chase tried to acquire the bank's 5,400 branches in 23 states in the United States.

You know, in March this year, JPMorgan Chase just acquired Bear Stearns, the fifth largest investment bank on Wall Street. In that acquisition, JPMorgan Chase received nearly $30 billion in funding support from the Federal Reserve.

Now it is going to acquire Washington Mutual Bank's branches and deposit business again, and JPMorgan Chase is also facing a shortage of funds.

This time the Federal Reserve will not lend money to JPMorgan Chase to acquire the assets of Washington Mutual Bank, which has been taken over by the Federal Deposit Insurance Corporation.

JPMorgan Chase needs to raise the corresponding funds on its own.

According to analysis, if JPMorgan Chase acquires Washington Mutual Bank's branches and deposit business, it will need to pay $2 billion to $3 billion. You know, Washington Mutual Bank's asset scale and deposit scale are nearly ten times that of IndyMac Bank. This price is quite cost-effective compared to the $1.5 billion that Standard Chartered Bank paid when it acquired IndyMac Bank's branches and deposits.

However, in contrast, because Washington Mutual Bank has been actively developing subprime and other risky mortgage businesses, its accumulated risks are also more than ten or even twenty times that of IndyMac Bank while expanding rapidly.

And unlike the treatment of IndyMac Bank, this time the FDIC will not use its deposit insurance fund for Washington Mutual Bank - according to public data, after the collapse of IndyMac Bank earlier this year, the FDIC's deposit insurance fund plummeted from $52.4 billion at the end of last year to $45.2 billion, and federal regulators were criticized by many parties.

Therefore, the price that JPMorgan Chase paid for acquiring the branch and deposit business of Washington Mutual Bank, the largest savings bank in the United States, at a lower price was that they needed to put up a considerable amount of funds to deal with some of the non-performing assets left by Washington Mutual Bank that were previously invested in subprime mortgage business with depositors' deposits.

This is also the reason why JPMorgan Chase needs to raise funds to complete this acquisition.

Of course, even if this is done, the benefits outweigh the disadvantages for JPMorgan Chase. According to Duane Hearst's disclosure to Barron, once this acquisition is completed, JPMorgan Chase's earnings per share in 2009 will increase by 50 cents.

Therefore, it is still necessary to take this opportunity to invest in JPMorgan Chase, but the specific investment plan still needs to be determined through negotiations between the two parties.

…

The Devonshire landed at the Yanjing Airport. This time Barron will live in the "Grand Duke's Mansion" with four courtyards.

His two children with Fan Bingbing were sent to Yanjing when Fan Bingbing went to America, and were taken care of by Fan Bingbing's parents and nanny.

When they arrived in Yanjing, they had already sent the two children here - Fan Bingbing missed them very much after not seeing them for a while.

Fan Bingbing is one year younger than Barron and has not yet celebrated her 27th birthday. Now she looks a little more mature than when Barron first met her.

It can be said that among his many women, Fan Bingbing is a very special one for Barron - not just because of her stunning appearance.

If we talk about beauty, there are many people around Barron who can be called stunning. Bonnie and Alia are not inferior to Fan Bingbing, but Fan Bingbing's Chinese-style beauty has the bonus of the soul of the previous life for Barron.

Now, after the two have a pair of children, this feeling has changed to a deeper level.

Before they moved in here, this courtyard had been cleaned in advance.

While Barron was playing with Fan Bingbing and the children, Alia was directing the maids who came here with Barron to decorate the entire courtyard and make it the most accustomed to Barron - after all, before this, he had hardly lived here. The few times he came to Yandu, he stayed in the "Little Duke's Mansion" near the Forbidden City.