London-listed JTC buys First Republic trust administration unit in JP Morgan carve out

JP Morgan added billions in loans to its balance sheet after acquiring First Republic Bank last year.

London-listed firm JTC has struck a deal to acquire one of First Republic’s trust administration arms from JP Morgan Chase for $21m (£17m).

The FTSE 250 fund services and corporate solutions firm announced on Monday that it had agreed to acquire First Republic Trust Company of Delaware (FRTC-DE) and make it part of JTC’s Private Client Services division.

Wall Street titan JP Morgan, the world’s biggest bank by market capitalisation, took over First Republic Bank after it became the second-largest American lender ever to fail during a wider regional banking crisis last spring.

FRTC-DE provides trust administration services to high-net-worth clients and has roughly $9bn (£7.3bn) of assets under administration by market value.

JTC said the all-cash deal would build on its expansion into the “highly valuable, fast-growing and fragmented” US market and be “highly complementary” to its recent acquisitions of the South Dakota Trust Company and New York Private Trust Company.

The deal is the latest in a series of institutional carve-outs by JTC, including its acquisition of Kleinwort Benson’s fund administration business in 2015, Merrill Lynch’s international trust & wealth structuring business in 2017 and RBC’s employee benefit plan administration business in 2021.

FRTC-DE generated revenue of $10.2m (£8.2m) and net income of $4.5m (£3.6m) in the year ending on 31 December 2023. JTC said it expected the acquisition to be accretive to its earnings per share in the first full year of ownership.

The transaction subject’s gross assets were $26.6m (£20.8m) as of 31 December 2023.

The transaction remains subject to customary closing conditions and full regulatory approval.

Nigel Le Quesne, chief executive of JTC, said: “We are looking forward to welcoming FRTC-DE’s highly experienced team and their clients to JTC, as we further develop and expand our personal trust services in this large and fast-growing market.

“FRTC-DE builds on our successful acquisitions of SDTC and NYPTC, bringing us greater scale in the US and provides opportunities to offer our wider range of services to FRTC-DE’s clients.”