The new owner of the Silicon Valley Bank aims to solve two tasks, including improving the business and restoring the reputation of a financial institution.
Peter Bristow, president of First Citizens, said that he directs his activities to establish effective control over the outflow of deposits and will not allow bankers to jump ship and join competitors. The head of the financial institution also spoke about the efforts to restore confidence in the Silicon Valley Bank, which in a certain sense has become the epicenter of the banking sector crisis.
Peter Bristow described the current state of affairs in the context of actions regarding SVB as the beginning of a path toward stabilization and return to business.
First Citizens retains the original name of the Silicon Valley Bank and interacts with it as one of the branches of its structure. At the same time, the financial institution is trying to return SVB to the category of trusted brands.
Peter Bristow noted that for 30 years the Silicon Valley Bank has been the main bank in the field of technology and life sciences, and the loss of this status and the fall from the top happened instantly. He also stressed that it took a lot of time to convince people that First Citizens would help SVB regain its position and continue the development strategy that the failed financial institution adhered to.
Some startups and investors in Silicon Valley are not very optimistic about the prospects of their interaction with First Citizens, noting that this bank does not have a full-fledged experience with venture capital. The head of a multibillion-dollar venture capital company said that SVB often made decisions that were meaningless outside the context of long-term planning. He also noted that the bank allowed itself to do this because it knew everyone in the ecosystem.
Peter Bristow suggested that First Citizens could renegotiate the terms of the Silicon Valley Bank’s lending to venture capitalists and companies. He noted that venture lending was the main principle of SVB’s work, but as a result, deposits could accumulate, some of which are unnecessary.
Amyas Gerety, a partner at QED Investors, believes that venture debt will become a smaller industry with the transition of the Silicon Valley Bank to new ownership. Players in this field, according to the expert, will more carefully choose the companies to which they provide loans. At the same time, he noted that the company’s path to greatness is determined not by the source of capital, but by the quality of the product and the novelty of ideas.
As we have reported earlier, First Citizens Community Bank Parent Gains Regulatory Approvals for Acquisition.