Three major Canadian banks have begun poaching clients of the bankrupt Silicon Valley Bank
Major Canadian banks have begun poaching clients of the bankrupt US Silicon Valley Bank (SVB), informed The Globe and Mail citing sources.
Three lenders, Bank of Montreal (BMO), Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBS) have launched calls for companies that previously worked with SVB and are now looking for a new partner. RBC and CIBS have pledged pre-approved term deposits and loans, as well as investment accounts, to businesses affected by the California bank shutdowns. BMO presented a toolkit for venture capitalists and tech companies and said it’s bigger and safer than financial institutions UNITED STATES.
SVB customers are already moving their deposits, loans and lines of credit to Canadian banks as turmoil mounts in the US banking system. For example, Vancouver-based Dooly Inc, which develops mobile apps, has already transferred its deposits to RBC.
Customer migration will make it difficult to sell SVB because a potential buyer of the bank is not interested in seeing top customers and their loans disappear before the deal closes. Aware of these risks, SVB CEO Tim Maiopoulos urged depositors to hold on to their deposits until the bank is sold.
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At the same time, Canadian banks will not buy the local division of SVB and its loan portfolio. Instead, they seek to attract as many attractive depositors as possible.
Silicon Valley Bank was the 16th largest bank in the United States with $209 billion in assets and $175 billion in depositors’ deposits. After its collapse, banks and financial institutions around the world lost hundreds of billions of dollars. According to experts, the ruin of the SVB could affect the entire American banking sector and lead to the failure of other credit institutions in the country, as well as problems of a larger scale.