SVB joint venture in China says its operations are “solid”

The joint venture that the collapsed US bank Silicon Valley Bank (SVB) It has in China assured this weekend that it has always operated in a “regulated and solid” manner in accordance with the regulations of the Asian country.

The SPD Silicon Valley Bank (SSVB) founded in 2012 together with the state-owned Shanghai Pudong Development Bank (SPD) as the first bank focused on technology in the country, also assured that its balance sheet operates “independent”, in a statement published this Saturday on its website.

According to the official Global Times newspaper, the SSVB focused on companies and investors “innovation oriented” in China, with operations that mainly covered eight sectors, among which health, smart manufacturing, semiconductors or techno-financial services (‘fintech’) stand out.

Throughout the weekend, several Chinese companies have acknowledged that they had deposits in the US at the SVB, many of them from the pharmaceutical or biotechnological sector, qualifying at the same time that the amounts were small percentages of their liquidity and that its operations would not be affected by the bank’s crisis.

Among the Hong Kong-listed firms that issued statements this weekend, the one that acknowledged the highest percentage of funds committed was Brii Biosciences, with “less than 9%” from his treasury at SVB.

However, the company assured that, “despite the closure of SVB, the company’s existing cash and bank balances remain sufficient for (…) the next three years” and added that he does not expect the situation to be a “material adverse impact”.

The stock market rebounds:

Despite this, the shares of this firm rose today a 0.76% until the mid-session stop, while the benchmark index for the stock market, the Hang Seng, did the same in a 2.26% after having left a 3.04% last Friday due to fears about the US banking sector.

The first part of the trading day this Monday in Hong Kong reflected a positive reaction to the plan launched this Sunday by US regulators to protect the deposits of the SVB and allow clients to have access from today to all the money deposited in the entity, although the shareholders and some of the company’s debt holders will not be covered by these guarantees.

SVB’s crisis started last Wednesday, when it announced that it was going to seek a capital increase to try to deal with its financial difficulties, which had led it to assume a loss of about 1.8 billion dollars by getting rid of investments worth about 21,000 million dollars.

The announcement led many clients to withdraw their funds, after which US regulators had to close the bank specializing in startups on Friday due to lack of liquidity, the same parameters under which another entity, Signature Bank, was closed this Sunday.

According to experts quoted by the local press, SVB was a key access door to the US capital market for many Chinese start-ups, which could turn to this type of entity in its initial phases, but which generally tend to focus their capital on the Asian country. upon reaching a certain size.

Source: EFE