SVB's Auction Block Includes Wealth Unit, Fund Manager
As U.S. regulators seek a buyer for the remnants of SVB Financial Group, they’ll be working to find a home for sprawling commercial-banking operations, a wealth unit, an investment bank and a fund manager.
Silicon Valley Bank was seized by regulators Friday amid a run on deposits and an aborted push to raise capital. The Federal Deposit Insurance Corp. now aims to find buyers for the firm’s various businesses to return as much of clients’ money as possible.
Major banks are likely to at least explore purchasing SVB businesses given their manageable size and the attractive client base of tech firms and their wealthy founders. The bank was undone by piling into bonds just before rates rose and a concentrated depositor base, but had posted profits every year before its rapid downfall.
Still, the FDIC’s statement on Friday didn’t indicate a likely quick sale of the whole firm. The regulator said it would issue an advance dividend to uninsured depositors within the next week with future payments perhaps coming as asset sales occurred.
The bank held about $212 billion in assets at year-end, a figure that has certainly shrunk since then as the firm sold holdings to raise cash and depositors pulled out their funds. More than half the bank’s assets were in a bond portfolio, a setup that brought losses when rates rose but should be relatively straightforward to offload.
The company had more than 8,500 employees as of Dec. 31, according to its annual filing. With dozens of offices around the world, the firm operates in the US and Canada, as well as the UK, Europe, Asia and the Middle East. The Bank of England said Friday it plans to declare the UK unit insolvent in a separate process.
Here’s a look at SVB’s operating segments:
Silicon Valley Bank
SVB’s commercial bank gained fame in California as the banker to private equity and venture capital firms, specializing in tech and health-care clients. It reported a profit of $3.4 billion for 2022, when it had around $172 billion in deposits. Its $5.23 billion in revenue was about 84% of the firm’s total for 2022.
