Chinese SVB Joint Venture Distances Itself from Bankruptcy... "Sound Management According to Chinese Regulations"

As the shock of the bankruptcy of the US Silicon Valley Bank (SVB) spreads to global markets, the SVB joint venture in China has emphasized independent management and distanced itself from the incident.

According to local media such as China Economic Net on the 12th, SPD Silicon Valley Bank, a joint venture between the US SVB and a local Chinese bank, stated in a press release on the 11th that its operations are conducted 'independently' and are unrelated to SVB. This bank was established in 2012 as the first US-China joint venture bank, with China’s state-owned Shanghai Pudong Bank (SPC) and SVB each holding a 50% stake.

[Image source=Yonhap News]

In its statement, SPD Silicon Valley Bank emphasized, "Our bank is managed independently" and "operates soundly based on Chinese laws and regulations." As of the end of 2021, the bank’s deposit balance was approximately 21.4 billion yuan (about 4.0835 trillion KRW). It primarily provides loans for startup-specific products within China, especially funding companies in the life sciences sector listed on the 'Ke Chuang Ban (Science and Technology Innovation Board),' known as the Chinese version of NASDAQ.

Chinese regulatory authorities are also reported to have convened an emergency meeting last weekend to discuss the impact of SVB’s bankruptcy. Foreign media reported that one of the countermeasures proposed at the meeting was for Shanghai Pudong Development Bank to acquire the shares of SVB’s local subsidiary. A representative from the Hong Kong Monetary Authority, where SVB has a resident office, explained, "We are paying close attention to the actions of overseas regulatory authorities and will monitor future developments."