The Federal Deposit Insurance Corporation (FDIC) decided on Monday to break up Silicon Valley Bank (SVB) and hold two separate auctions for its traditional depository unit and its private bank.
The Federal Deposit Insurance Corporation (FDIC) decided on Monday to divide the Silicon Valley Bank (SVB) and holding two separate auctions for its traditional depository unit and its private bank, after failing to find a buyer for the failed lender last week.
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Until March 22, it will seek offers for the Silicon Valley Private Bank and until two days later for the bridge bank. The private bank, which is part of SVB’s retail operations, is aimed at high net worth individuals. The asset portfolios will be open to bids from banking and non-bank financial companies, according to the regulator.
Last week, some sources told Reuters that the FDIC was planning to relaunch the SVB sale process, with the regulator looking at a possible spin-off of the failed lender.
The parent company of the lender SVB Financial Group filed for reorganization under Chapter 11 bankruptcy protection on Friday and was seeking buyers for its assets after measures to shore up investor confidence failed.
The FDIC, which insures deposits and handles bankruptcies, had informed banks bidding at the SVB and Signature Bank auctions that it was considering retaining some of the undervalued assets.
Reuters reported on Sunday that efforts by some regional US banks to raise capital and allay fears about their health are running up against potential buyers and investors worrying about looming losses on their assets.
The run on the bank was sparked by balance sheet concerns after the lender sold a portfolio of Treasuries and mortgage-backed securities to Goldman Sachs at a loss of $1.8 billion and then tried to plug that hole with a fundraising. of funds of 2,250 million dollars.
Source: Ambito
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