FDIC Readies Sale of SVB’s $460 Million German Business

Beginning next week, bidders will get the chance to purchase Silicon Valley Bank’s German business.

The Federal Deposit Insurance Corp. (FDIC) is set to open a data room on June 20 to qualified bidders for the bank’s $460 million German asset portfolio, according to a sales announcement from the agency.

The FDIC took over Silicon Valley Bank (SVB) in March after a run on the lender’s deposits triggered a broader regional banking crisis.

Since then, the regulator has been selling off pieces of SVB. The bank’s British subsidiary was sold to HSBC soon after its collapse — and recently relaunched under a new name. Most of SVB’s American operations were purchased by First Citizens Bank in late March.

In the case of this upcoming sale, bidders need authorization to conduct business in the German market, the FDIC announcement said.

These bidders could be banks licensed to operate in Germany, the European Union and European Economic Area (EEA) nations or a non-EEA licensed bank that has a branch in Germany branch.

The assets up for sale include loan balances of $460 million and commitments for a further $494 million of lending, along with additional assets in Berlin and Frankfurt, the announcement said. Prospective buyers have until July 19 to submit bids, with closing scheduled for July 31.

Earlier this month, the FDIC said the banking crisis had strained its deposit insurance fund, which had $116 billion in assets at the end of this year’s first quarter, down from $128 billion at the close of 2022. The agency also said the ratio of assets to insured deposits in America’s banks fell to 1.1%, lower than the legally mandated 1.35% minimum.

In May, the FDIC unveiled a plan to collect $15.8 billion in extra fees over two years to recoup its losses after the SVB and Signature Bank rescues. Under this plan, 113 banks would pay a “special assessment,” with lenders with at least $50 billion in assets covering 95% of the cost.

Meanwhile, tremors from SVB’s collapse continue to be felt, with reports this week that federal officials were investigating Goldman Sachs’ role in the failed banks’ final days.

A report by the Wall Street Journal said the Federal Reserve and Securities and Exchange Commission are seeking documents dealing with Goldman’s capacity as buyer of SVB’s securities portfolio and its role in advising on the bank’s doomed capital raise.

The goal of this probe, the report said, is to figure out if Goldman Sachs’ investment banking and trading operations carried out improper communications on the portfolio sale.

A Goldman spokesperson told PYMNTS that after buying securities from SVB, Goldman told teh bank that it would not act as its advisor, and told them to hire a third-party financial adviser.