The search for a new owner of the U.S. Silicon Valley Bank (SVB), which went bankrupt after 40 years due to a massive withdrawal of deposits (bank run), is facing difficulties, the Wall Street Journal (WSJ) reported on the 13th (local time).
According to sources familiar with the matter, the U.S. Federal Deposit Insurance Corporation (FDIC) failed to find a buyer for SVB at an auction held last weekend and plans to conduct a second auction soon.
The FDIC intends to proceed with a second sale auction rather than selling SVB's assets separately.
According to an explanation the FDIC gave to U.S. Senate Republican lawmakers on the same day, U.S. regulators have classified SVB's bankruptcy as a threat to the financial system, which has allowed for additional flexibility in the sale process.
Under these regulations, deposits exceeding the insured limit of $250,000 (approximately 327 million KRW) can be fully protected, and sale conditions can be adjusted favorably for potential buyers through loss-sharing agreements and other measures.
At the SVB sale auction held last weekend, no major U.S. banks participated in bidding, and although one other institution submitted a bid, the FDIC reportedly rejected it.
CNBC reported that U.S. bank PNC Financial initially expressed intent to participate in the first bid but withdrew after conducting due diligence on SVB.
Meanwhile, the UK’s HSBC purchased SVB’s UK branch for ?1 (approximately 1,587 KRW). On the same day, HSBC CEO Noel Quinn and Ian Stewart, head of HSBC UK, announced that they would invest ?2 billion (approximately 3.2 trillion KRW) to revive SVB’s UK branch after the acquisition.
HSBC CEO Quinn stated, "SVB UK branch customers will be able to conduct their banking safely as usual under HSBC’s protection." According to HSBC, SVB’s UK branch serves 3,000 corporate clients, with loans amounting to ?5.5 billion and deposits totaling ?6.7 billion.
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