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Startup-focused default lender SVB Financial Group said on Monday it plans to explore strategic alternatives for its businesses, including holding company SVB Capital and SVB Securities.
SVB’s plan comes after California regulators shut down its banking unit on Friday following a failed share sale that drained $42 billion in deposits in one day and sapped liquidity at the company.
SVB Capital and SVB Securities are separate divisions of SVB Financial and are not part of Silicon Valley Bank, which is resolved under the jurisdiction of the Federal Deposit Insurance Corporation (“FDIC”) and the US Federal Reserve.
What caused the failure of Silicon Valley Bank?
The company also said that its board has appointed a restructuring committee consisting of five independent directors.
The FDIC said Monday that it had transferred all Silicon Valley Bank deposits to a newly created bridge bank and that all depositors would have access to their funds starting Monday morning.
Last week, the technology lender failed to raise enough capital to plug a $1.8 billion hole after it sold a $21 billion portfolio of available-for-sale securities at a loss as rising interest rates eroded the value of US treasuries.
HSBC buys UK branch of failed US bank SVB for £1
“Unfortunately, one of the first consequences of SIVB’s collapse is likely to be that it will cause a cascade of uninsured deposits from smaller, less diversified banks to larger, more diversified ones,” Oppenheimer said in a note on Monday.
The collapse of SVB, the biggest bank to fail since Washington Mutual went bust during the 2008 financial crisis, has sent bank stocks crashing and sparked fears of contagion across global markets.