SVB Financial shares slide again on balance sheet concerns

By farahat

March 10, 2023

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(Reuters) – SVB Financial Group shares plunge % In premarket trading on Friday, the struggling bank’s funding plan raised concerns over the strength of its balance sheet. The losses extended a day earlier after the concerns.

The stock is trading at $. If the current loss remains the same before the bell rings, the course will be closed at Lowest opening price in more than a decade.

Shares of start-up-focused banks plummet % On Thursday, it was the biggest loss ever, after revealing plans Raised more than $2 billion from investors to cover losses from the sale of its bond portfolio.

The plan has failed to reassure investors concerned about whether the financing will be enough to stem a decline in deposits.

SVB said its deposits fell faster than expected due to higher spending by its clients, mainly technology and healthcare startups.

Venture capital investments, an important source of funding for bank clients, are also expected to be constrained in the near term as the Fed raises rates and offers fast-turnaround funds. There is little hope.

The fundraising plan also comes in the context of testimony this week by Federal Reserve Chairman Jerome Powell, who said the central bank may need to raise rates by more than expected in response to recent strong data.

The debacle of SVB, which did business as Silicon Valley Bank, spreads to Other US and European banks. this200 Standard & Poor’s 10 The bank index fell 6.6% on Thursday, while a sell-off by major European banks weighed on the region’s main index on Friday. “Concerns about unrealized losses at banks are, in our view, a bond portfolio boosted by yesterday’s sharp drop in Bank of America shares. Presents a buying opportunity for European banks,” analysts at Credit Suisse wrote in a note. 100

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