Amidst the turmoil in the banking industry, a rival has acquired Silicon Valley Bank

After its sudden collapse earlier this month, a buyer has been found for troubled US regional lender Silicon Valley Bank. First Citizens has agreed to purchase all loans and deposits from the Californian lender, in a deal aimed at restoring calm to financial markets.

Silicon Valley Bank, a significant lender to the tech industry since the 1980s, became the biggest US bank to fail since 2008 when regulators seized it after a sudden run on deposits. In the days that followed, its UK arm was purchased by HSBC for £1.

US regulators created Silicon Valley Bridge Bank from SVB after the collapse, and First Citizens will take over that entity from Monday. The transaction is structured as a whole bank purchase with loss share coverage. The 17 former branches of SVB will open on Monday as “Silicon Valley Bank, a division of First Citizens Bank.”

According to the US Federal Deposit Insurance Corporation (FDIC), the transaction covers $119 billion in deposits and $72 billion in assets.

Head of Investment at interactive investor, Victoria Scholar, provides an explanation regarding the transfer of SVB’s deposits and assets to First Citizens Bank and FDIC. First Citizens has a history of acquiring struggling lenders in FDIC-supported deals. The losses on SVB’s bond portfolio and customer withdrawals caused concern across the banking sector, which was already under pressure after the collapse of Credit Suisse. This led to fears of contagion and a drop in Deutsche Bank’s shares.

However, the deal for SVB has helped to restore calm in the market, with banks outperforming at the European open. Deutsche Bank is up by more than 6.5%, Credit Suisse is up by over 2.5%, and Commerzbank, Société General, and BNP Paribas are also bouncing back on Monday.

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