- JPMorgan Chase bought the San Francisco-based First Republic Bank on May 1 after it failed.
- The Wall Street Journal reported that it wants to retain a hands-on approach to wealth management.
JPMorgan Chase's takeover of the failed First Republic Bank could boost efforts to develop its wealth-management business, .
But despite being the biggest US bank, accounting for more than 13% of deposits and 21% of credit-card spending, JPMorgan has lagged behind some competitors in terms of serving wealthier customers, according to The Wall Street Journal.
San Francisco-based First Republic counted many rich tech entrepreneurs as clients running businesses that could one day be floated or sold – deals that JPMorgan's investment bank could handle, the newspaper reported.
When the deal was announced on May 1, CEO Jamie Dimon said JPMorgan had been asked by the government to "step up" when First Republic failed. It also said the deal was expected to "modestly" benefit the company.
Now, executives say they're seeking to integrate First Republic's hands-on approach to wealth-management into JPMorgan.
"We want to not break it," Marianne Lake, co-head of JPMorgan's consumer bank, told The Journal. "We have to do it in a way that works for this company."
The bank is considering turning First Republic branches into luxurious spaces designed specifically for affluent customers seeking advice on investing and managing their assets, according to the report. It will also need to retain First Republic's financial advisers, The Journal said.
However, the takeover has sparked criticism from those who fear the biggest banks are buying smaller rivals to become even more powerful.
"The failure of First Republic Bank shows how deregulation has made the too big to fail problem even worse," Sen. Elizabeth Warren tweeted the day the deal was announced.
"A poorly supervised bank was snapped up by an even bigger bank — ultimately taxpayers will be on the hook. Congress needs to make major reforms to fix a broken banking system."
Dimon said the deal was an example of the US system functioning properly.
"We need large, successful banks in the largest and most successful economy in the world," he said. "And anyone who thinks that it'd be good for the United States of America not to have that, you call me directly."