First Citizens, the new owner of Silicon Valley Bank’s (SVB) US operations, is slashing approximately 500 jobs held by former SVB employees.
First Citizens purchased SVB after its failure two months ago.
SVB’s collapse, along with two other US banks, sparked concerns of a broader banking crisis, prompting intervention by authorities.
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In March, HSBC acquired SVB’s UK business for a nominal fee of £1 ($1.25).
First Citizens CEO, Frank Holding, highlighted the challenges faced by SVB earlier this year and noted that the layoffs would impact select SVB corporate functions.
However, it excludes client-facing roles and the India-based support team.
These job cuts are estimated to account for around three percent of the company’s total workforce.
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First reported by Axios, First Citizens, headquartered in Raleigh, North Carolina, identifies as America’s largest family-controlled bank and has been actively acquiring troubled banks in recent years.
All 17 former SVB branches were rebranded under the First Citizens name as part of the deal.
In the UK, HSBC acquired SVB’s British operations in a deal facilitated by the government and the Bank of England.
HSBC announced earlier this month that the takeover had contributed to a $1.5 billion profit boost.
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Greg Becker, the former CEO of SVB, apologized during Congressional testimony, attributing the bank’s collapse to rising interest rates and significant customer withdrawals.
However, regulators have held SVB’s leadership responsible for inadequate management of interest rate risks and a lack of business diversification.
SVB’s collapse was followed by the failure of another US bank, Signature Bank, and in early May, JP Morgan Chase took over the First Republic, which was also under pressure.
Swiss officials brokered a rescue deal in Europe for troubled banking giant Credit Suisse, with rival UBS involved, while Swiss prosecutors investigate the matter.
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