Silicon Valley Bank’s new owner, according to reports, is struggling to turn around the financial institution.
First Citizens BancShares Inc. has acquired SVB and dozens of its bankers have moved to rival institutions in the four weeks following the acquisition. The Financial Times reported that SVB's deposits have continued to shrink.
Peter Bristow of First Citizens in North Carolina told the FT that "we're still experiencing outflows."
The FT didn't report how much money was now deposited at Silicon Valley Bank. The decline follows a period of declining deposits for the institution, which had already seen its deposits drop from $119 billion in March when regulators took it over to $56 billion by March 26 when First Citizens acquired it. This plunge was on top of a $42 billion bankrun that led to SVB’s insolvency.
A group of Silicon Valley investors encouraged their peers to invest in SVB during the FDIC administration period, but to no avail.
SVB's continued cash outflow has also been accompanied by a personnel outflow. Bloomberg reported that Mitsubishi UFJ Financial Group had hired over 20 employees from SVB, including Bob Blee who led SVB's Technology Corporate Banking Division and four other senior executives.
This move was similar to one made by HSBC Holdings plc at the beginning of this month. The British banking giant recruited more than 40 employees from SVB. David Sabow was the head of Silicon Valley's tech and health care business banking division.
The FT reported that First Citizens (Nasdaq FCNCP) is still in due diligence with its acquisition.