Wednesday, March 24, 2010

JPMorgan closes in on tax refund deal with FDIC: report

(Reuters) – JPMorgan Chase (JPM.N) is closing in on a deal with the Federal Deposit Insurance Corp (FDIC) that could result in a tax refund of about $1.4 billion for the bank, the Wall Street Journal reported, citing people familiar with the talks.

JPMorgan was not available to comment on the report.

As part of a larger settlement with Washington Mutual's bondholders, JPMorgan can claim $1.4 billion of funds in the FDIC receivership to protect itself against exposure to mortgages that WaMu serviced, the Journal said.

Washington Mutual Inc (WAMUQ.PK), which is tied to the biggest bank failure in U.S. history, is eligible to receive about $5.6 billion in tax refunds as part of a court settlement. WaMu was seized by the FDIC in 2008 and was later sold to JPMorgan foJustify Fullr $1.9 billion.

On March 12, Washington Mutual agreed to split the two potential tax refunds with JPMorgan and the FDIC.

WaMu agreed to receive $900 million of a $2.6 billion expected return, with the rest going to JPMorgan. A second $2.6 billion return will be bring in $1.04 billion for Washington Mutual with the rest going to the FDIC.

(Reporting by Anuradha Ramanathan in Bangalore; Editing by Dan

No comments:

Post a Comment