Yahoo Finance After Silicon Valley Bank's Downfall And $1.8 Billion Loss Last Year, It's Bouncing Back With Hundreds Of New Clients
In the wake of Silicon Valley Bank’s (SVB) tumultuous period marked by financial losses and customer withdrawals, the institution has attracted new clients and regained lost trust.
Silicon Valley Bank, a longstanding pillar in the startup ecosystem, made headlines in March 2023 following a $1.8 billion loss on its bond portfolio. The setback triggered a chain reaction, prompting a stock crash and mass withdrawals from concerned customers.
In response to the crisis, federal regulators intervened, leading to SVB’s parent company, SVB Financial Group, filing for bankruptcy.
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First Citizens Bank stepped in to acquire SVB, heralding a new chapter for the institution.
With the acquisition finalized, First Citizens Bank expressed its commitment to preserving SVB’s legacy and strengthening its foothold in key markets. The move also signaled an opportunity for expansion, particularly in California and the Northeast, leveraging SVB’s expertise in private wealth management.
"We are committed to building on and preserving the strong relationships that legacy SVB’s Global Fund Banking business has with private equity and venture capital firms," according to First Citizen Bank's press release. "This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast. SVB’s Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach."
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Despite the challenges of the past year, SVB’s recent announcement shows the bank bouncing back.
"It feels simultaneously astounding and inevitable that Silicon Valley Bank is in the position we're in today, dedicated to rebuilding trust and actively delivering the solutions our innovation economy clients rely on," said Marc Cadieux, President of Silicon Valley Bank.
SVB has onboarded hundreds of new clients after having thousands leave to join competitors. Banks like Mercury and Brex took a portion of SVB's clients with deals and promotions. Mercury got 8,700 new clients that week and Brex got 4,000 new clients.
Coming from a lack of trust and confidence in customers, SVB’s client retention has grown to 81% of pre-March 2023 clients continuing to maintain active accounts.
Even after facing significant challenges, SVB has emerged stronger, rebuilding trust and reinforcing its position as a cornerstone of the startup ecosystem.
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This article After Silicon Valley Bank's Downfall And $1.8 Billion Loss Last Year, It's Bouncing Back With Hundreds Of New Clients originally appeared on Benzinga.com
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