SVB-SVB will be acquired by First Citizens news in Nigeria-Foreign news

First Citizens, a U.S. bank, announced on Monday that it has agreed to buy all loans and deposits from Silicon Valley Bank, whose failure earlier this month raised concerns about the industry all across the world.

SVB, a significant lender to the IT sector since the 1980s, was taken over by regulators following an unexpected run on deposits, making it the largest US bank to fail since 2008.

After SVB’s bankruptcy, regulators created Silicon Valley Bridge Bank, which First Citizens will take over as of Monday.

According to a statement from First Citizens, it had agreed to acquire “essentially all loans and certain other assets, and assume all client deposits and certain other obligations of Silicon Valley Bridge Bank.” It added in a statement that the deal was “arranged as a whole bank purchase with loss sharing coverage.”

The 17 former SVB locations, according to the statement, will reopen on Monday as “Silicon Valley Bank, a division of First Citizens Bank.”

The transaction involves assets worth $72 billion and deposits of $119 billion, according to the US Federal Deposit Insurance Corporation on Sunday.

The FDIC noted that SVB depositors will “automatically become depositors of First Citizens Bank,” continuing to guarantee deposits.

The Federal Reserve developed a new lending tool for banks in an effort to stop a repeat of SVB’s fast collapse, while the United States Treasury and Federal Reserve also laid out preparations to ensure SVB customers could access their accounts.

Customers of similarly smaller US banks experienced a crisis of confidence after SVB’s failure, and many withdrew their funds and deposited them in larger institutions because they believed those organizations were too large for the government to fail to save them.

The unrest also reached Europe, where UBS acquired ailing Swiss lender Credit Suisse.

Recently, concerns about a growing banking sector crisis were rekindled as shares in the long-struggling Deutsche Bank dropped sharply on Friday due to the lender’s rising cost of default cover.

Even though the problems in the banking sector have been linked to their rate hikes, central banks have continued with monetary tightening despite concerns about global contagion. Instead, they are focusing on fighting inflation.


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