March 20 (Portal) – The Federal Deposit Insurance Corporation decided on Monday to wind up Silicon Valley Bank (SVB) and hold two separate auctions for its traditional deposit unit and its private bank, after failing to find a buyer for the failed lender last week .
Bids are being solicited by March 22 for Silicon Valley Private Bank and March 24 for Bridge Bank. The private bank, which is based in the retail operations of the SVB, is aimed at wealthy private customers.
Banking and non-banking financial firms are allowed to bid on the asset portfolios, the regulator said.
First Citizens BancShares Inc (FCNCA.O), one of the largest buyers of failed US lenders, has made a bid for the entire Silicon Valley bank, a source with knowledge of the matter said. If the FDIC decides to solicit bids for parts of SVB, First Citizens expects to bid as well. Bloomberg had previously reported on their interest in SVB.
First Citizens said in a statement that it “does not comment on market rumors or speculation.”
Last week, sources told Portal that the FDIC plans to restart the sale process for SVB, with the regulator targeting a possible resolution of the failed lender.
Lender SVB Financial Group’s parent company filed for Chapter 11 reorganization on Friday and was looking for buyers for its assets after steps to boost investor confidence failed.
The FDIC, which insures deposits and administers bankruptcy trustees, had notified banks considering bids in the SVB and Signature Bank (SBNY.O) auctions that it is considering keeping some of the submerged assets.
Portal reported Sunday that efforts by some US regional banks to raise capital and allay fears about their health are met with concerns from potential buyers and investors about impending losses on their assets.
The run on the bank was sparked by balance sheet concerns after the lender sold a portfolio of Treasury and mortgage-backed securities to Goldman Sachs (GS.N) at a $1.8 billion loss and then attempted to plug that hole with a capital raise of $2.25 billion to stuff .
Reporting by Manya Saini in Bengaluru; Edited by Arun Koyyur and Nick Zieminski
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