JPMorgan moves to acquire troubled First Republic Bank loom

BEIJING—China’s manufacturing activity contracted in April, official figures showed Sunday, due to tapering global demand and slow domestic recovery after Covid-related curbs were lifted.

The official manufacturing purchasing managers’ index—a key gauge of Chinese factory output –fell unexpectedly to 49.2 in April from 51.9 in March, and below the 50-point mark that separates expansion and contraction in activity, data from the National Bureau of Statistics showed.

Analysts polled by Bloomberg News had expected April factory activity of 51.4. The drop comes after February recorded the highest reading in more than a decade as factories returned to normal following a surge in Covid cases.

China’s economy grew 4.5 percent in the first three months of the year as the country reopened after dropping strict health controls that helped keep the coronavirus in check but battered businesses and supply chains.

But the world’s second-largest economy is also beset by a series of other crises, from a debt-laden property sector to flagging consumer confidence, global inflation, the threat of recession elsewhere and geopolitical tensions with the United States.

The official non-manufacturing PMI, which measures growth in the services and construction sectors, fell to 56.4 from 58.2 in March. The March reading was the highest since May 2011, as the country saw a surge in demand for travel, entertainment and other leisure services unavailable for nearly three years during the pandemic.

The government has set a comparatively modest growth target of around five percent this year, a goal Premier Li Qiang has warned could be hard to achieve. AFP

SAN FRANCISCO— US financial authorities have taken possession of California’s troubled First Republic Bank, which will be acquired by JPMorgan Chase, government regulators announced Monday in the latest banking failure.

First Republic, the second-largest bank by assets to collapse in US history, has been in freefall since disclosing last week that it lost more than $100 billion in deposits in the first quarter, causing its shares to plummet.

The San Francisco-based lender had been under heavy pressure after the bankruptcies in March of regional banks Silicon Valley Bank and Signature Bank sparked fears of contagion and rattled financial markets.

Officials have been scrambling to come up with a rescue package.

The US Treasury and the Federal Deposit Insurance Corporation (FDIC), an agency in charge of guaranteeing bank deposits, approached six banks last week to gauge their interest in buying First Republic’s assets, a source familiar with the matter told AFP.

As part of the deal struck early Monday, the California regulator appointed FDIC as the receiver of First Republic, to be immediately sold to JPMorgan Chase.

On Monday, the 84 First Republic offices in eight states will reopen as branches of JPMorgan Chase Bank, according to the FDIC.

“To protect depositors, the FDIC is

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entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank,” FDIC said in a statement.

The federal regulator estimated it will cost about $13 billion to cover First Republic’s losses.

The government’s takeover and sale of the bank comes two months after the failure of Silicon Valley Bank, which led to a snowball effect as concerned investors looked for signs of weakness in the broader banking sector in the United States and Europe.

Another US regional bank failed in the aftermath of SVB’s collapse, while the Swiss banking giant Credit Suisse became the highest-profile casualty a few days later when it was pushed by regulators to merge with its bitter rival, UBS. AFP