LONDON’S BUSINESS NEWSPAPER
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ALL CLEANED UP JP MORGAN PICKS UP FIRST REPUBLIC TO STAVE OFF BANKING SYSTEM CONCERNS
GUY TAYLOR, CHARLIE CONCHIE AND CITY A.M. REPORTERS JP MORGAN yesterday announced it had acquired the bruised and battered First Republic Bank in a deal brokered by the US government. In what amounts to the second biggest bank failure in American history, First Republic saw confidence drain away last
week after announcing it had seen more than $100bn in outflows. The US Federal Deposit Insurance Corporation (FDIC) effectively took control of the bank over the weekend, with the deal to shift just shy of $100bnworth of deposits and more than $200bn of assets onto JP Morgan Chase’s books, costing the Wall Street giant $10.6bn. The FDIC said it would take a hit of
around $13bn to its deposit insurance fund and that depositors would be protected. Shareholders in what was America’s 14th biggest lender at the turn of the year, meanwhile, have been wiped out. JP Morgan said they didn’t seek out the deal but had been invited to bid in an auction alongside other Wall Street players, with the firm’s boss Jamie
Dimon saying “our government invited us and others to step up, and we did”. Although the collapse of First Republic comes closely on the heels of Silicon Valley Bank’s demise, Signature Bank’s sign-off and the rescue of Credit Suisse by UBS, Dimon played down fears of a banking crisis. “There are only so many banks that were offsides this way,” he told analysts,
referring to banks that were overly exposed to rising interest rates. “This part of the crisis is over,” he said. Analysts tended to agree. Philip Richards, a senior analyst at Bloomberg Intelligence, told City A.M. yesterday that he didn’t expect “any material impact” on the UK or European banking sector when markets open after the 1 May break.
Coronation set to give London a boost – though bank holiday hurts City hospitality ABBY WALLACE AND CITY A.M. REPORTERS PUBS across the UK are bracing for an influx of visitors to celebrate the coronation of King Charles III this week, with some trade groups suggesting the sector could see a multi-million pound boost from increased sales. UK pubs will see £120m-worth of extra takings as people flock to pubs during the bank holiday
weekend, figures from the British Beer and Pub Association (BBPA) show. Some 62m pints are expected to be poured. Trade bodies expect almost 2m people to descend on London alone to watch the event from pubs or restaurants. Around 1.75m visitors are expected to flock to London’s West End over the course of the bank holiday weekend, bringing in £50m,
according to the New West End Company, which represents 600 restaurants, hotels, and retailers. “The West End’s recovery is on track, but in order to ensure it remains globally competitive, the UK needs to increase its appeal to high spending international visitors,” said
Dee Corsi, the group’s chief executive. The benefits of the coronation may not be felt in the Square Mile, though, with the bank holiday hitting lunchtime trade.
However, Martin Williams, the man behind Gaucho and City and Wharf favourite M Restaurant, said there is a chance the coronation “will prove to be a long-term tourist attraction for the capital”. Williams and Corsi both also called for the government to reverse its decision to end VAT-free shopping for tourists, which Burberry chair Gerry Murphy last week described as a “spectacular own goal” for the UK economy.
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