The US Federal Deposit Insurance Corporation said Monday that First Citizens BancShares will purchase Silicon Valley Bank’s deposits and loans. This comes little over two weeks after the largest banks collapse in the United States since the global financial crisis.
Following the announcement, First Citizens stock surged more than 45% in early Monday morning trading on Wall Street.
The deal will see First Citizen acquire roughly $72 billion worth of SVB assets for approximately $16.5 billion.
The transaction includes the purchase of about $72 billion in SVB assets at a $16.5 billion discount. Nonetheless, approximately $90 billion in securities and other assets will remain under receivership pending FDIC disposition.
Speaking after the news, the Federal Deposit Insurance Corporation said that, “The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023.”
Banking stocks have rebounded from recent losses following the news.
Contents
Gold Is Plunging Ahead of U.S. Consumer Confidence Report
Gold prices plunged to start the week, as traders returned to equity markets following First Citizens Bank’s acquisition of SVB.
In addition, traders began to anticipate Tuesday’s U.S. consumer confidence report, which is expected to decline.
The Conference Board survey is expected to fall to a reading of 101, from 102.9 the month prior.
Should this be the actual figure, the decline in sentiment will come despite inflation moving lower last month.
XAUUSD dropped from a recent high at $2,000, hitting a low of $1,943.87 today.
Saudi Bank Chair Resigns After Comments Spark Credit Suisse Crash
The resignation of Saudi National Bank Chairman Ammar Al-Khudairy comes just days after he stated in mid-March that the SNB was unlikely to increase its holding in Credit Suisse.
This came at a time when the European lender was dealing with an investor confidence crisis, which caused its stock to plummet.
According to a statement from the bank, Ammar al-Khudairy is stepping down for “personal reasons.”
SNB, which owned roughly 9.9% of Credit Suisse, lost its investment in the company, after an emergency takeover by rival UBS.
Al-Khudairy commented that the SNB would not offer Credit Suisse any further liquidity, which then led to a run on the bank.
He will be replaced by Managing Director and group CEO Mohammed al-Ghamdi.
“You don’t stop a train with a brick wall; even there’s a wall of selling, the train is going through that brick wall and take out a lot of bears.”
Paul Tudor Jones
