Collapsed US Silicon Valley Bank bought by rival
First Citizens BancShares has purchased the assets and loans of the collapsed US lender, Silicon Valley Bank (SVB), the US Federal Deposit Insurance Corporation (FDIC) announced. SVB’s collapse earlier this month raised concerns about the stability of other lenders, resulting in a significant drop in bank shares worldwide.
In Europe, worries over the strength of Swiss banking giant Credit Suisse led to a rushed takeover by rival UBS.
Nerves among investors have remained, and bank shares fell sharply on Friday.
SVB collapsed soon after a run on the bank and was swiftly followed by the failure of another US bank Signature.
The collapse of the two US banks was the biggest bank failure in the US since the 2008 financial crisis.
First Citizens, which describes itself as America’s biggest family-controlled bank, has acquired around $72bn of SVB’s assets and loans at a discount of $16.5bn. Meanwhile, the FDIC will still hold approximately $90bn of SVB’s assets. The UK arm of SVB was bought by HSBC for £1 earlier this month.
The increasing interest rates have affected the value of bank investments, contributing to the bank failures in the US. This has sparked fears that there could be other problems in the banking sector that have not yet been revealed.
Global central banks are attempting to calm the nerves by stressing the banking system is safe and lenders are well-capitalised.