SVB FINANCIAL GROUP

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U.S. regulators willing to share losses for sale of SVB, Signature Bank - FT

03/17/2023 | 02:49pm

(Reuters) - U.S. regulators are willing to consider the prospect of the government backstopping losses at Silicon Valley Bank and Signature Bank if it helps push through a sale, the Financial Times reported on Friday, citing people briefed on the matter.

Sources told Reuters on Wednesday that regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have asked banks interested in acquiring failed lenders SVB and Signature Bank to submit bids by March 17.

However, the FDIC has not given bidders any indication of the size of losses it would be willing to backstop or any sense of how the arrangement would be structured, the people told the Financial Times.

The FDIC did not comment on the Financial Times report.

A weekend action launched by the FDIC to sell SVB failed on Sunday after major banks balked at carrying out such a risky deal in a short amount of time.

The lack of interest was in part because the agency was unwilling to discuss the possibility of shouldering any losses on the lenders' assets, one of the people told the Financial Times.

A sale of either SVB or Signature could trigger immediate losses because the new buyer would have to mark down the price of some assets to reflect their current market value, the report said.

The Financial Times said Blackstone Group and Apollo Global Management have expressed interest in buying parts of SVB's loan book.

However, the FDIC is only willing to take bids from banks for the whole SVB commercial bank, including loans and deposits, the report added, citing people involved in the process.

SVB Financial Group, the parent company of Silicon Valley Bank, earlier on Friday filed for a court-supervised reorganization under Chapter 11 bankruptcy protection.

(Reporting by Akriti Sharma and Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel)

Reuters 2023
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