Banking stocks rally after Silicon Valley Bank rescue deal
Bank shares rise after US regional lender picks up parts of collapsed Silicon Valley Bank
Bank shares rose yesterday after parts of the collapsed Silicon Valley Bank were snapped up by a US regional lender.
The deal involving North Carolina-based First Citizens eased concerns about the wider industry, which is experiencing its biggest shock since the 2008 financial crisis.
Reports that US authorities were considering more support for embattled lenders also fueled investor interest after weeks of turmoil.
The collapse of the SVB and two smaller US lenders had sparked global tremors, resulting in the demise of 167-year-old Credit Suisse.
Epicenter: The collapse of the SVB and two smaller US lenders had sparked global tremors resulting in the demise of 167-year-old Credit Suisse
SVB’s UK arm has already been bailed out in a £1 emergency takeover by HSBC.
Concerns have also spread to regional banks in the US and First Republic in particular. However, shares were up 10.5 percent yesterday as other regional lenders like Keycorp and Zions also posted gains, as well as bigger names like JP Morgan and Citigroup. First Citizens rose 22 percent.
In Europe, Deutsche Bank — which fell 8.5 percent on Friday as fears about the European banking sector spread — climbed 6 percent yesterday.
UK banks were also in first place with Barclays up 2.3 per cent, NatWest up 0.5 per cent, HSBC up 1.3 per cent and Lloyds up 1.3 per cent.
The deal for SVB sees First Citizens taking over assets of £90bn, deposits of £46bn and a loan portfolio of £59bn, as well as the 17 branches.
SVB was acquired by the Federal Deposit Insurance Corporation (FDIC) earlier this month following a bank run that saw depositors raise billions of dollars.