Washington Mutual Taken Over By JPMorgan

Posted by admin

September 26, 2008

Washington Mutual collapses under the continued onslaught of economic pressures in the largest US bank failure in history.

JPMorgan Chase took over the failed savings and loan giant for a $1.9 billion deal announced by the US FDIC on Thursday. Washington Mutual, also known as WaMu, was the latest bank to fail due to heavy exposure to the US sub-prime mortgage crisis. Shares plummeted 85% this year leading to speculation of, and now reality to, financial ruin.

JPMorgan Chase acquired the assets, deposits as well as certain liabilities of the failed bank which had approximately $309 billion in assets. Earlier in March, JPMorgan had taken over Bear Stearns.

Purchasing WaMu was a strategically sound move for JPMorgan. Chairman Jamie Dimon said, “This deal makes excellent strategic sense for our company and our shareholders”.

Washington Mutual had approximately $188 billion in deposits turning JPMorgan Chase into the largest US depository institution with more than $900 billion in overall customer deposits.

Chairman of the FDIC Stella Blair assured Washington Mutual customers their interests would be protected by saying, “For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks”.

In addition to JPMorgan Chase, other bidders for takeover of WaMu included Citigroup, Wells Fargo, Spain’s Banco Santander, HSBC of Britain, and TD Dominion of Canada.

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