[US] Silicon Valley Bank bought by rival

The assets and loans of collapsed US lender Silicon Valley Bank (SVB) are being bought by its rival First Citizens BancShares, Inc. as part of a takeover deal, BBC News reports.

Investors welcomed the deal which sent First Citizens shares up more than 40 per cent and the rise helped drive broader gains in banking shares. These have been in turmoil since SVB's failure provoked fears over the entire sector’s stability.

In Europe, concerns about the strength of Swiss banking giant Credit Suisse reportedly led to a rushed takeover by rival UBS.

The deal for SVB ends a saga that started earlier this month after a run on the bank forced US regulators to step in. SVP’s collapse was swiftly followed by the failure of another US lender, Signature Bank.

The demise of these two big names in banking represented the biggest bank failures in the US since the financial crisis of 2008.

Under the SVB takeover deal, all 17 former SVB branches will open under the First Citizens brand on March 3 (Monday). SVB customers have reportedly been advised to continue using their current branch until they receive notice from First Citizens Bank that their account has been fully moved across.

First Citizens is based in North Carolina and calls itself America's biggest family-controlled bank. It has figured among the largest buyers of troubled banks in recent years.

The Federal Deposit Insurance Corp (FDIC) - the US financial regulator that announced the deal - said First Citizens had bought around $72bn of SVB's assets at a discount of $16.5bn. The deal will make the bank one of the 25 biggest in the US.

The FDIC reportedly said it would retain control of about $90bn of SVB's assets. It estimated the cost of the SVB failure to its deposit insurance fund would be around $20bn. 

In addition, it will receive an equity stake in First Citizens worth up to $500m.

The FDIC said it had received 27 bids from 18 bidders before choosing the First Citizens deal. ​

The UK arm of SVB was bought by HSBC earlier this month for £1.

Source: BBC News

The assets and loans of collapsed US lender Silicon Valley Bank (SVB) are being bought by its rival First Citizens BancShares, Inc. as part of a takeover deal, BBC News reports.

Investors welcomed the deal which sent First Citizens shares up more than 40 per cent and the rise helped drive broader gains in banking shares. These have been in turmoil since SVB's failure provoked fears over the entire sector’s stability.

In Europe, concerns about the strength of Swiss banking giant Credit Suisse reportedly led to a rushed takeover by rival UBS.

The deal for SVB ends a saga that started earlier this month after a run on the bank forced US regulators to step in. SVP’s collapse was swiftly followed by the failure of another US lender, Signature Bank.

The demise of these two big names in banking represented the biggest bank failures in the US since the financial crisis of 2008.

Under the SVB takeover deal, all 17 former SVB branches will open under the First Citizens brand on March 3 (Monday). SVB customers have reportedly been advised to continue using their current branch until they receive notice from First Citizens Bank that their account has been fully moved across.

First Citizens is based in North Carolina and calls itself America's biggest family-controlled bank. It has figured among the largest buyers of troubled banks in recent years.

The Federal Deposit Insurance Corp (FDIC) - the US financial regulator that announced the deal - said First Citizens had bought around $72bn of SVB's assets at a discount of $16.5bn. The deal will make the bank one of the 25 biggest in the US.

The FDIC reportedly said it would retain control of about $90bn of SVB's assets. It estimated the cost of the SVB failure to its deposit insurance fund would be around $20bn. 

In addition, it will receive an equity stake in First Citizens worth up to $500m.

The FDIC said it had received 27 bids from 18 bidders before choosing the First Citizens deal. ​

The UK arm of SVB was bought by HSBC earlier this month for £1.

Source: BBC News