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JPMorgan Chase & Co. raised $10 billion in a stock sale to cover writedowns and losses after taking on deposits and branches of Washington Mutual Inc., the biggest U.S. savings and loan, for $1.9 billion.
The shares were sold for $40.50, or 6.8 percent less than yesterday's closing price of $43.46. New York-based JPMorgan sold 246.9 million shares, according to a statement today.
JPMorgan, now the largest U.S. bank by deposits, said the capital infusion would offset an estimated $8 billion of credit provisions, writedowns and losses in the third quarter. The WaMu acquisition will force JPMorgan to set aside an additional $2 billion to cover bad loans on the failed thrift's books. Chief Executive Officer Jamie Dimon said the deal would boost earnings per share by 50 cents in 2009.
``We want to just maintain the same strong balance sheet and capital ratios going forward as we have in the past,'' Dimon said on a conference call last night.
The bank said it may sell another 37 million shares to cover excess demand.