American bank First Citizens to acquire failed SVB bank

(Patria) - American bank First Citizens will acquire all deposits and loans of Silicone Valley Bank (SVB), which went bankrupt in early March, the American Deposit Insurance Corporation (FDIC) announced yesterday.

The transaction involves $72 billion in assets, the FDIC announced, stating that 17 SVB branches will open today as First Citizens, reports AP.

The collapse of SVB bank caused panic in the banking sector in the United States, with consequences that also affected European markets.

SVB, which was close to the technology sector, suddenly found itself in difficulties when the sale of financial bonds worth $21 billion was announced, with a loss of $1.8 billion and the intention to increase capital.

Massive withdrawals followed, and on March 10, authorities deemed it insolvent and took control of the bank's assets, which was the largest bank bankruptcy in the US since 2008, reports RSE.

From now on, all loans and deposits of this institution will be managed by First Citizens bank, while the FDC administration will take care of the remaining $90 billion in assets.

The collapse of SVB shook the banking industry, and because of this, the FDIC and other US regulators acted to protect depositors and prevent wider financial chaos.

SVB, headquartered in Santa Clara, California, collapsed on March 10 when depositors rushed to withdraw money fearing the bank was in trouble. It was the second-largest bank in American history to fail.