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First Citizens BancShares Inc announced yesterday (27) that it has acquired Silicon Valley Bank (SVB) deposits and loans, ending the chapter of the crisis of confidence that has rocked global financial markets.


First Citizens BancShares acquires SVB. (Reproduction/Reuters)


The FDIC, the US agency responsible for guaranteeing bank deposits and which took control of SVB this month, said in a note that it had received valuation rights for First Citizens BancShares shares with a potential value of up to $500 million as part of the Combined.

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First Citizens said the resulting company will be resilient having a diversified loan book and deposit base.

According to the announcement, the First–Citizens Bank & Trust Company unit will take over SVB assets of US$110 billion, deposits of US$56 billion and loans of US$72 billion.

“The prudent risk management approach will continue to protect clients and shareholders through all economic cycles and market conditions,” it wrote in a note.

In addition, First Citizens will receive a line of credit from the FDIC to guarantee the liquidity of resources, in addition to having established an agreement with the regulator to share responsibilities in losses arising from commercial loans, which offers greater security against possible credit losses.

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While analysts hailed the move as positive for financial stability and the venture capital industry, some noted that it does not address the core problem facing the US banking system today: deposits flowing from smaller banks to larger banks or U.S. funds. money market.

On March 10, SVB became the largest US bank to declare bankruptcy since the 2008 financial crisis. The intervention by California regulators to close the bank has caused tensions in the global banking industry. The bank is headquartered in Santa Clara and at the end of last year, SVB was the 16th largest creditor in the US, with about $209 billion in assets.

Featured photo.Banco SVB (Reproduction/ AFP)

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Silicon Valley Bank Acquired by First Citizens BancShares

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