Wind-up follows OSFI taking control of SVB Canada earlier this week.
Canadian regulators have now moved to wind up SVB Canada’s operations after taking over temporary control of it earlier this week.
The wind-up is a court order that forces the Canadian branch of SVB into liquidation. The order was approved on Wednesday after The Office of the Superintendent of Financial Institutions Canada (OSFI) took over permanent control of SVB Canada.
The order allows for an auction process of SVB Canada to begin. OSFI noted that the process is intended to facilitate the transition of SVB Canada to the American bridge bank created by FDIC.
OSFI said the restructuring is meant to be done “in a way that best serves the interests of its creditors and will allow operations of the Silicon Valley Bank to continue in Canada.”
Auditor firm PwC has been appointed by the court to oversee the transition.
OSFI announced on March 12 it was taking temporary control of the assets of the Canadian branch of SVB following the collapse of the financial institution last week. At the time, it noted plans to seek temporary control and wind-up SVB Canada’s operations.
It had been predicted that SVB Canada, which only provides loans locally, would be bought by a third party, much like what occurred when British regulators helped broker a deal that saw HSBC acquire the assets of SVB UK for £1.
The move to restructure SVB Canada comes after a Canadian buyer did not come forward. As reported by The Globe and Mail, the Royal Bank of Canada (RBC) was one of several banks that considered buying SVB Canada in recent days. “Ultimately, RBC could not see a way to make the deal work and did not proceed with further discussions,” the Globe wrote.
“I took this action to affect an orderly transition of the Canadian branch of Silicon Valley Bank to the FDIC bridge bank,” said OSFI superintendent Peter Routledge. “I am satisfied that this approach, developed with officials in the United States, is in the best interest of the branch’s creditors.”
OSFI noted it no longer has an active role in the resolution of SVB Canada.
Feature image courtesy Unsplash. Photo by Mariia Shalabaieva.
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