US agency to restart sale of defunct Silicon Valley Bank

Oluwanifemi Ojo
Oluwanifemi Ojo
Silicon Valley Bank

The United States Federal Deposit Insurance Corp is preparing to restart the sale procedure of Silicon Valley Bank after the most recent auction was unsuccessful in attracting any buyers.

Reuters reported that sources familiar with the matter have revealed that the regulator is exploring the possibility of dividing the bankrupt lender and is currently contemplating various alternatives.

One of the options being examined by the regulatory body is the possibility of initiating a sale process for SVB’s private bank, with bids expected to be submitted by Wednesday.

This was according to one of the sources who requested confidentiality as the discussions are private.

The private bank, which is housed within SVB’s retail operations, provides services for individuals with high net-worth.

According to insiders, the FDIC intends to initiate another auction process on Friday for SVB’s depositary bank, which is part of its retail activities and comprises all of its consumer deposits.

However, the sources cautioned that these plans might be subject to changes.

The FDIC is yet to respond to requests for comments. The deadline for bids covering the entire SVB was on Sunday.

The FDIC, which is responsible for insuring deposits and handling failed banks, has notified banks considering making offers for SVB and Signature Bank in the auctions that it may keep some of the assets of the failed banks that are in a difficult financial position.

Reuters stated earlier on Sunday that several U.S. regional banks are struggling to raise capital and alleviate concerns about their financial stability.

This situation is being compounded by potential buyers and investors expressing unease about the probability of significant losses from the banks’ assets.

Bloomberg News reported earlier on Sunday that the FDIC intends to divide SVB.

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