The assets and loans of the bankrupt American bank Silicon Valley Bank (SVB) are being bought by the rival bank First Citizens BancShares.
The collapse of SVB in early March raised concerns about the stability of other credit institutions. As a result, the shares of banks around the world have rapidly fallen in price.
In Europe, concerns about the sustainability of the Swiss banking giant Credit Suisse resulted in its purchase by another competitor – UBS.
Markets are still nervous, although stocks in the banking sector went up on Monday at stock exchange trading.
SVB, which has been lending to a significant number of Silicon Valley startups, has been going through difficult times for several months: poor management and the general situation in the technology sector have affected.
The bank could not find $2.25 billion to cover losses from the sale of assets – mainly government securities that changed in price after the discount rate increase.
And the bank’s final collapse was caused by the so-called bank run – a “customer raid”, when, for various reasons, SVB customers began to withdraw their savings en masse – primarily due to concerns about the stability of the bank, but partly also because in the current financial climate, technology startups do not have enough cash.
The American financial regulator closed Silicon Valley Bank and confiscated its assets. Following SVB, another American bank, Signature Bank, went bankrupt. The collapse of SVB and Signature was the largest bankruptcy in the United States since the 2008 financial crisis.
In accordance with the SVB takeover deal announced by the US Federal Deposit Insurance Corporation (FDIC), all 17 former SVB branches will open under the First Citizens brand from Monday.
SVB clients are advised to continue using the services of their branch until they receive a notification from First Citizens Bank that their accounts have been fully transferred.
First Citizens, with its head office in Raleigh, North Carolina, is considered one of the largest American banks under family control. In recent years, he has become one of the largest buyers of troubled banks.
He acquired assets and loans worth about $72 billion – 16.5 billion less than their value. The remaining SVB assets worth about $90 billion will continue to be managed by the FDIC.
The corporation stated that the bankruptcy of SVB cost its deposit insurance fund about $ 20 billion. After the bankruptcy of SVB, its British division was bought by HSBC bank for a symbolic one pound.