FDIC Prepares To Sell SVB’s $460 Million German Business
Starting next week, people will be able to bid on the German business of Silicon Valley Bank.
A sales announcement from the Federal Deposit Insurance Corp. (FDIC) says that on June 20, approved bidders for the bank’s $460 million German asset portfolio will be able to enter a data room.
In March, the FDIC took over Silicon Valley Bank (SVB) after a run on the bank’s deposits caused a larger banking problem in the area.
Since then, the government has sold off parts of SVB. The bank’s British branch was sold to HSBC soon after it went out of business, and it just got a new name. Late in March, First Citizens Bank bought most of SVB’s American business.
The FDIC said that people who want to bid on this future sale must have permission to do business in the German market.
These bidders could be banks that are licensed to do business in Germany, the European Union, and European Economic Area (EEA) countries, or they could be banks that are allowed to do business outside of the EEA but have a branch in Germany.
The announcement said that the assets for sale include loan balances of $460 million and pledges for another $494 million in loans, as well as other assets in Berlin and Frankfurt. Bids will be accepted until July 19, and the sale will close on July 31.
The FDIC said earlier this month that the banking crisis had put a strain on its deposit insurance fund. At the end of the first quarter of this year, the fund had $116 billion in assets. Which is less than the $128 billion it had at the end of 2022. The agency also said that the ratio of assets to insured savings in U.S. banks dropped to 1.1%, which is less than the minimum legal requirement of 1.35%.
In May, the FDIC announced a plan to make up for its losses from the SVB and Signature Bank bailouts by getting $15.8 billion in extra fees over the next two years. Under this plan, 113 banks would pay a “special assessment,” and 95% of the cost would be covered by lenders with at least $50 billion in assets.
Meanwhile, the fall of SVB is still being felt. This week, there were reports that federal officials were looking into Goldman Sachs’ part in the last days of the failed bank.
The Federal Reserve and Securities and Exchange Commission are seeking papers related to Goldman’s involvement as buyer of SVB’s securities portfolio and advisor on the bank’s failed capital increase, according to the Wall Street Journal.
The story said that the goal of this investigation is to find out if Goldman Sachs’s investment banking and trading operations talked about the portfolio sale in a wrong way.
After buying securities from SVB, Goldman ordered the bank to appoint a third-party financial consultant, according to a spokesperson.
