First Citizens BancShares Inc., one of the biggest buyers of failed US lenders, is still hoping to strike a deal for all of Silicon Valley Bank, according to people familiar with the matter. Picture: Elijah Nouvelage/Bloomberg
Seventeen former SVB branches will open as First Citizen branches on Monday. First Citizen acquires about $72bn in SVB assets at a discount of $16.5bn and the estimated cost of SVB’s failure to FDIC’s deposit insurance fund is about $20bn, the FDIC said. “You sweep Silicon Valley off to another buyer, which is good, but the bigger issue is guaranteeing deposits at all those other [regional] banks,” said IG Markets analyst Tony Sycamore in Sydney.Last week ended with indicators of financial market stress flashing and Germany’s biggest lender, Deutsche Bank, in the crosshairs, with its shares down 8.5% on Friday and the cost of insuring its bonds against default up sharply.
“It’s clearly not over,” Australia and New Zealand Banking Group CEO Shayne Elliott said in an interview posted to the bank’s website, where he said the turmoil has the potential to escalate into a bigger financial crisis. In Europe, bank bonds are under pressure and credit default swaps, or the cost of insurance against defaults, uneasily high. Deutsche Bank’s five-year CDS hit their highest since late 2018 on Friday, data from S&P Global Market Intelligence shows.