By Mehnaz Yasmin
(Reuters) -Defunct startup-focused lender SVB Financial Group said on Monday that it was planning to explore strategic alternatives for its businesses including the holding company, SVB Capital and SVB Securities.
SVB Financial also named William Kosturos as its chief restructuring officer.
Kosturos was previously the restructuring chief for Washington Mutual, which collapsed during the global financial crisis in 2008 in what was the biggest bank failure in U.S. history.
SVB’s plan comes after Californian regulators shuttered its banking unit on Friday following a failed share sale that drained $42 billion in deposits in a single day and sucked out liquidity at the company.
SVB Capital and SVB Securities are separate divisions of SVB Financial and not part of Silicon Valley Bank, which is undergoing resolution under the jurisdiction of the Federal Deposit Insurance Corp (FDIC) and the U.S. Federal Reserve.
The company also said its board had appointed a restructuring committee, which comprises five independent directors.
The FDIC on Monday said it had transferred all Silicon Valley Bank deposits to a newly created bridge bank and that all depositors would have access to their money beginning Monday morning.
Last week, the tech lender failed to raise enough capital to plug a $1.8 billion hole after it sold a $21 billion portfolio of available-for-sale securities at a loss as rising interest rates eroded the value of U.S. treasuries.
“Unfortunately, one of the first consequences of SIVB’s collapse is probably that it will cause a flight of uninsured deposits from smaller, less diverse banks to larger, more diverse ones,” Oppenheimer said in a note on Monday.
The collapse of SVB has crippled banks stocks and triggered concerns of a contagion throughout global markets.
(Reporting by Mehnaz Yasmin and Niket Nishant in Bengaluru; Editing by Anil D’Silva and Maju Samuel)