SVB Financial Group Reportedly Looks to Sell After Trading Halted

SVB Financial Group has reportedly ended its plan to raise capital and is looking to sell.

The parent company of Silicon Valley Bank — which has been beset by customer withdrawals and plummeting stock price in recent days — is now working to sell to a large financial institution, sell a stake to a large investor or find some other form of rescue, The Wall Street Journal (WSJ) reported Friday (March 10), citing unnamed sources.

SVB could arrange a deal in the next few days or, failing that, it could need a rescue from the government, according to the report.

SVB Financial Group did not immediately reply to PYMNTS’ request for comment.

This news comes hours after the company’s share trading was halted following a 68% premarket plunge.

That move, in turn, came after SVB’s share price suffered a 60% drop Thursday (March 9).

Investors and depositors have been fleeing from the bank after SVB said it had incurred a $1.8 billion after-tax loss on the sale of its investments. Some investors, concerned about SVB’s liquidity, have advised clients to withdraw their money from the bank.

SVB’s sale of $21 billion of U.S. Treasuring holdings and securities — on which it realized the $1.8 billion loss — was driven by an outflow of deposits it has experienced as depositors leave to find higher rates.

Investors’ response to these trends has had a widening impact on the banking industry as the top four U.S. banks — J.P. Morgan, Bank of America, Wells Fargo and Citigroup — lost a combined $52 billion of market capitalization Thursday in the wake of Wednesday’s and Thursday’s news about SVB.

Commercial bank deposits have fallen for the first time since 1948 as consumers move to higher-yield alternatives.

As PYMNTS reported Friday, this news hints at the fact that capital — the lifeblood for innovative firms, including FinTechs — is going to be a bit harder to come by.

Silicon Valley Bank’s key clients are venture capital firms and startups, and they have been drawing down on their deposits at the same time inflation and higher interest rates are hitting everyone.

On the company’s website, SVB noted that it is “the FinTech industry banking leader.”