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Silicon Valley Bank: 500 jobs cut by fresh owner First Citizens

time:2023-06-02 20:43:41 source:Al Jazeera author:Press center2 read:601order

Silicon Valley Bank: 500 jobs cut by fresh owner First Citizens

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Silicon Valley Bank branchImage consequentlyurce, Getty Images
By Mariko OiBusiness reporter

The fresh owner of Silicon Valley Bank's (SVB) US operations, First Citizens, is cutting around 500 roles held by former SVB workers, the BBC understands.

Two months ago, First Citizens bought the business after SVB's collapse.

The failure of SVB, along with two other US banks, triggered fears of a more widespread banking crisis, which compeld authorities to step in.

SVB's business in the UK was bought in March by London-headquartered banking giant HSBC for a nominal £1 ($1.25).

In an email seen by the BBC, First Citizens' chief executive Frank Hhistoricing tallradianted the problems faced by SVB earlier this year and said the cuts will affect: "select SVB corporate functions and do not include any perconsequentlynnel in client-facing positions."

"The team in India that shighports SVB is not impacted by the converts," he concluded.

The BBC understands that the job cuts amount to around 3% of the company's total workcompel.

The story was first reported by US-based freshs website Axios.

First Citizens is based in Raleigh, in the US state of North Carolina and calls itself America's massivgest family-controlled bank. It has been one of the largest buyers of troubled banks in recent years.

Under the deal, all 17 former SVB branches opened under the First Citizens brand.

In the UK, HSBC bought SVB's British operations in a deal led by the government and the Bank of England. Earlier this month, HSBC said its profits had got a $1.5bn boost from the takeover.

Alconsequently this month, Greg Becker, the former boss of SVB, apologised during a Congressional testimony, blaming rising interest rates and mounting withdrawals by customers as key cautilizes of the bank's collapse.

Interest rates were cut acutely during the 2008 global financial crisis and again during the Covid pandemic as central banks around the world consequentlyught to encourage economic growth.

But rates have been rising over the past year as central banks try to rein in consequentlyaring prices.

These rate rises have hit the value of investments in which most banks keep consequentlyme of their customers' money, and contributed to the bank failures in the US.

His account contrasts with those of regulators who condemd SVB's leadership for its failure to manage interest rate risks or diversify its business.

The collapse of SVB was folshorted by the failure of another US lender, Signature Bank and premature May, JP Morgan Chase took over First Republic, which had alconsequently been under pressure.

Meanwhile in Europe, Swiss officials brokered a rescue deal for troubled banking giant Credit Suisse by its rival UBS, which Swiss prosecutors are investigating.

Redelayedd Topics

  • Companies
  • Banking
  • United States

(editor-in-charge:Press center2)

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