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Economics

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First Citizens to acquire collapsed Silicon Valley Bank

First Citizens Bank to acquire deposits and loans of bankrupt Silicon Valley Bank, covering $119 billion in deposits and $72 billion in assets. SVB’s 17 branches will open as First Citizens on Monday, and depositors will automatically become depositors of First Citizens Bank, insured by the FDIC.

Economists expect US recession, above-target inflation this year

The majority of economists predict a US recession and high inflation until 2024, according to a semiannual survey by the National Association for Business Economics (NABE), which saw over two-thirds of respondents expect inflation to remain above four per cent by the end of the year. The US Federal Reserve has raised rates 4.75 percentage points to combat rising inflation.

TikTok users protest proposals for US ban at Congress

TikTok content creators protested against a potential ban on the app at the US Capitol, arguing that the platform is no more prone to data breaches than other apps. A group of around a dozen teenagers, teachers, and business owners rallied at Congress to draw attention to the benefits of TikTok on their lives and livelihoods.

Tencent annual net profit falls by 16 per cent in 2022

Tencent’s net profit fell 16% YoY in 2022, earning 188.2 billion yuan ($27.3 billion), as China’s tech sector faced increasing regulatory scrutiny over anti-competitive behavior and data security.

Swiss sweat over size of new superbank

UBS and Credit Suisse’s merger will create the biggest bank in Switzerland, raising concerns about its size. Both banks are considered too big to fail and are of strategic importance to the global banking system. Some in business, industry, and politics are sceptical about the merger and the impact on services offered to companies, costs, and competition. The merger prevented the collapse of Credit Suisse and triggered criticism among Swiss political circles, with calls for further regulation and partial nationalization.

Credit Suisse deal wipes out high-risk debt holders

Credit Suisse’s $17.3 billion worth of high-risk debt will be written off as part of its merger with UBS, according to Swiss authorities. The 16 billion Swiss francs of additional tier 1 bonds will be written down, resulting in an increase in the bank’s core capital. Shareholders will receive three billion Swiss francs, while the AT1 bonds will be written off to zero, a blow to bondholders. The merger with UBS was designed to prevent Credit Suisse’s troubles from spreading to the wider banking industry.

US regulator sells failed Signature Bank assets to another lender

Flagstar Bank will take over deposits and some loan portfolios of failed Signature Bank, according to the Federal Deposit Insurance Corporation. The bank’s 40 branches will open under Flagstar on Monday, but $60 billion in loans and $4 billion in deposits related to Signature Bank’s digital banking business will remain under the regulator’s control. Meanwhile, the FDIC is seeking to sell the failed Silicon Valley Bank in at least two parts after a massive wave of withdrawals from the bank sparked fears of contagion across the industry.

UBS takeover of Credit Suisse: the main points

UBS’s takeover of Credit Suisse will create a banking giant worth three billion Swiss francs, preserving financial stability and creating a wealth management behemoth with $5 trillion in total invested assets. The deal will be an all-share transaction, and Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares held. The Competition Commission will have no say in the exceptional merger between the country’s two biggest banks, and the merger is expected to be consummated by the end of 2023.

UBS takes over Credit Suisse in move to calm the markets

UBS to acquire Credit Suisse for $3.25 billion in a bid to prevent economic turmoil from spreading throughout Switzerland and beyond, with the deal receiving support from Washington, Frankfurt, and London. The acquisition creates Switzerland’s largest banking giant, raising concerns over possible layoffs.

China lowers bank reserve requirement in boost to flagging economy

China’s central bank will cut the reserve requirement ratio by 0.25 percentage points starting 27 March, in a move to boost the country’s economy weakened by the pandemic.