US will break up SVB to find buyer – 03/20/2023 – Market

The Federal Deposit Insurance Corporation (FDIC) of the United States decided on Monday (20) to break up Silicon Valley Bank (SVB) and hold two separate auctions for its traditional banking unit and its private bank, after failing to find a buyer for the insolvent bank as a whole last week.

The FDIC will seek bids for private banking through March 22 and for traditional banking through March 24.

Banking and non-banking financial companies will be able to bid on asset portfolios, the regulator said.

First Citizens BancShares, one of the largest buyers of failed banks in the United States, still hopes to close a deal for the entire Silicon Valley Bank, according to a Bloomberg News report, citing sources familiar with the matter.

First Citizens and the FDIC did not immediately respond to a request by Reuters for comment on the report.

Last week, sources told Reuters that the FDIC was planning to relaunch the SVB sale process, with the regulator seeking a possible spin-off.

The parent company of SVB Financial Group filed for bankruptcy on Friday and sought buyers for its assets after measures to bolster investor confidence failed.

The FDIC, which insures deposits and administers foreclosures, told banks considering bids at the SVB and Signature Bank auctions that it was considering retaining some of the assets that are under water.

The run on the bank was triggered by balance sheet concerns after the bank 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 through a capitalization of $2.25 billion.