By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Private Banks RankingPrivate Banks Ranking
Notification Show More
Latest News
MU, PARA, MKC and more
MU, PARA, MKC and more
Finance
China tackles chip talent shortage with new courses, higher pay
Business
JPMorgan’s Jamie Dimon to be deposed in Epstein case, plaintiffs’ lawyer says
Banking
First Citizens acquisition could leave SVB parent’s $1.9B in limbo
First Citizens acquisition could leave SVB parent’s $1.9B in limbo
Banking
Finding Available Land Much Easier Than Developing It
Aa
  • Finance
  • Business
  • Banking
  • Investing
  • ETFs
  • Mutual Fund
  • Personal Finance
  • 2022 RANKING
Reading: European banking stocks sink as Silicon Valley Bank jitters spread
Share
Private Banks RankingPrivate Banks Ranking
Aa
  • Finance
  • Business
  • Banking
  • Investing
  • ETFs
  • Mutual Fund
  • Personal Finance
  • 2022 RANKING
Search
  • Finance
  • Business
  • Banking
  • Investing
  • ETFs
  • Mutual Fund
  • Personal Finance
  • 2022 RANKING
Have an existing account? Sign In
Follow US
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Private Banks Ranking > Blog > Finance > European banking stocks sink as Silicon Valley Bank jitters spread
Finance

European banking stocks sink as Silicon Valley Bank jitters spread

By Private Banks Ranking 3 weeks ago
Share
3 Min Read
European banking stocks sink as Silicon Valley Bank jitters spread
SHARE

European banking stocks fall over 4% in early trade Friday

European banking stocks sold off sharply in early trade Friday as jitters surrounding U.S. bank SVB Financial — which plunged 60% Thursday — spread around the world.

It followed an announcement by the tech-focused lender of a capital raise to help offset bond sale losses.

The Euro Stoxx Banks index was on pace for its worst day since June, led by a decline of more-than 8% for Deutsche Bank. Societe Generale, HSBC, ING Groep and Commerzbank all fell more than 5%.

Silicon Valley Bank caters heavily to startup firms, particularly venture-backed tech and life sciences companies in the U.S. The 40-year-old company was forced into a fire sale of its securities on Thursday, dumping $21 billion worth of holdings at a $1.8 billion loss while raising $500 million from venture firm General Atlantic, according to a financial update late Wednesday.

The company said in a letter from CEO Greg Becker on Wednesday that it had sold “substantially all” of its available-for-sale securities and was aiming to raise $2.25 billion through common equity and convertible preferred shares.

The U.S. Federal Reserve has hiked interest rates aggressively over the past year, which can cause long-dated bond values to fall, and SVB plans to reinvest proceeds from its sales into shorter-term assets.

Billionaire investor and Pershing Square CEO Bill Ackman said in a tweet on early Friday that should SVB fail, it could “destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash.”

“If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.”

See also  Sun Cable’s Collapse and the Australian Role in Southeast Asia’s Energy Transition – The Diplomat

Russ Mould, investment director at British investment platform AJ Bell, said SVB’s announcement should not have come as a “major surprise” after a period in which “appetite from lenders and investors towards this part of the market has dried up.”

“However, in a heavily interconnected banking industry it’s not so easy to compartmentalise these sorts of events which often hint at vulnerabilities in the wider system. The fact SVB’s share placing has been accompanied by a fire sale of its bond portfolio raises concerns,” Mould said.

“Lots of banks hold large portfolios of bonds and rising interest rates make these less valuable — the SVB situation is a reminder that many institutions are sitting on large unrealised losses on their fixed-income holdings.”

This is a breaking news story and will be updated shortly.

Source link

You Might Also Like

MU, PARA, MKC and more

Bitcoin holds ground amid Binance lawsuit, XRP continues run up, U.S. equities dip

Wall Street ends down with tech; investors assess bank comments

Bank Crisis ‘Exacerbating Nerves’ in Some Home Buyers and Sellers

Jamie Dimon is being deposed over JPMorgan Chase role in Epstein lawsuits

TAGGED: Bank, banking, European, jitters, Silicon, Sink, spread, Stocks, Valley
Share this Article
Facebook Twitter Email Print
Share
Previous Article Hedge funds’ Europe stock buying spree unlikely to be maintained -JP Morgan
Next Article Ethereum can be subjected to harsh sell pressure this week, here's why Ethereum can be subjected to harsh sell pressure this week, here’s why
Leave a comment

Leave a Reply Cancel reply

You must be logged in to post a comment.

Private Banks RankingPrivate Banks Ranking
Follow US

© 2022 Private Banks Ranking- 52-54 Lime Street, EC3, London. All Rights Reserved.

  • Blog
  • Contact
  • Privacy Policy
  • Terms & Conditions
Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

I have read and agree to the terms & conditions
Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?