First Republic's rescue by JPMorgan means the worst of the banking uncertainty is over, Citi CEO says

• First Republic's rescue by JPMorgan will put an end to the worst of the banking uncertainty, Citi CEO Jane Fraser says.
• "This is a case of a small handful of banks that were poorly managed, and getting this addressed is very important," she told Bloomberg.

The worst of the banking uncertainty is likely over thanks to JPMorgan's rescue of First Republic, according to Citigroup boss Jane Fraser.

"It's always a sad day when you see a bank fail but we are all very pleased to get the major source of uncertainty that was remaining from the recent bank turmoil addressed, and that is a good thing because fundamentally the US financial system is sound," she told Bloomberg TV on Monday.

"This is a case of a small handful of banks that were poorly managed, and getting this addressed is very important," she added.

JPMorgan stepped in to buy First Republic from the Federal Deposit Insurance Corporation (FDIC) on Monday, acquiring close to $92 billion worth of assets as well as certain liabilities.

The rescue deal came after First Republic's first-quarter results showed customers had yanked over $100 billion worth of deposits in the three months ending March 31, after the collapse of Silicon Valley Bank sparked fears about the wider US financial system.

Fraser said that she's now "more optimistic" about the health of the banking sector, although she believes there could be more mergers in the future as it becomes harder for smaller lenders to compete.

"I am anticipating there will be some more consolidation – we do have over 4,500 banks and it's likely that the minimum efficient scale will rise," she told Bloomberg. "But I don't think that brings into question a system that is the envy of the world."

"This is a strong and highly-desirable financial system, it works," Fraser added.

Citi itself played a role in the rescue of First Republic as one of the 11 banks that deposited $30 billion into the California lender on March 16 to help it weather a tidal wave of withdrawals.

"I think it's a statement that the 11 major banks in the country, in 30 hours, put $30 billion to work to buy the time to get the right solution and answer put in place," Fraser told Bloomberg.

"That was our intention – it wasn't to provide the answer, it was to give the time for confidence to get restored and our regulators to do their job, which they did," she added.

Read more: Why First Republic failed, and what it means for the rest of the banking industry