Silicon Valley Bank has started to see the return of depositors and investors who pulled their money earlier this year. — Bloomberg
Las Vegas: In a quiet, beige hospitality suite tucked away in Las Vegas’s Venetian hotel, executives at Silicon Valley Bank – the tech-friendly lender which collapsed after a bank run – gathered to hammer home a message: The bank is back.
After failing in a matter of days and largely being subsumed by regional lender First Citizens BancShares Inc weeks later, the business – now a unit of First Citizens and still using its old name – is fighting to win back clients and reassert itself as a go-to financial partner for startups and venture capital funds.
“We’re not afraid to re-earn that trust,” Christopher Hollins, the bank’s head of product sales, said in an interview.
The company was among thousands attending the annual Money 20/20 conference in Las Vegas this week, one of the largest events for financial-technology and payments executives.
They converged together with regulators, investors and lawyers to discuss an industry that’s facing pressure as a pandemic boom recedes. Number one on the event’s agenda: “Trust & Uncertainty.”
Silicon Valley Bank seized the moment to telegraph its message: Blasted across the conference venue were giant screens advertising its offerings, including one with a lightly tongue-in-cheek tone: “Silicon Valley Bank can help you through Most Valuable Players to Initial Public Offerings,” it read. “Yes, SVB.”
But bank executives speaking at the meeting acknowledged the challenge ahead of them.
Not only does the lender have to instill confidence in clients, it’s also confronting a world where rivals are seeking to fill the void it left.
JPMorgan Chase & Co, for one, is marshaling resources to become the new financial partner for startups, while regional lender Citizens Financial Group Inc just rolled out a private bank to capture wealthy clients.
But Silicon Valley Bank has started to see the return of depositors and investors who pulled their money earlier this year. The bank failed after parent SVB Financial Group disclosed losses on its investments which sent its stock into freefall.
Depositors and investors yanked their cash – trying to pull out US$42bil in a single day – and the bank tipped into Federal Deposit Insurance Corp receivership before being auctioned off.
“Many of them have come back to us and said, Oh, I like what I used to get. I want it back,” Gagan Kanjlia, Silicon Valley Bank’s chief product officer, said at a separate conference meeting.
The bank still has the largest population of bankers and specialists focused on the innovation economy, according to Kanjlia.
A spokesperson for the firm later said that “few” banking clients ultimately terminated their relationships with the lender.
That didn’t stop the odd joke at the bank’s expense from rippling through some of the conference panels, even if the mood was more subdued than in past years.
Following a pandemic-induced boom in digital payments and online shopping which enthused investors, the industry is now grappling with the prospect of an economic slowdown and rising recession risk amid higher interest rates. — Bloomberg
