The main entrance of Silicon Valley Bank is seen in Menlo Park, California U.S., on Friday, March 10, 2023. REUTERS/Michaela Vatcheva
By Akriti Sharma and Nia Williams
(Reuters) -A Canadian regulator on Sunday said it was taking temporary control of Silicon Valley Bank’s Canadian branch, as the fallout from the collapsed U.S. startup-focused lender reverberated around the world.
The Office of the Superintendent of Financial Institutions (OSFI) said it is seeking to gain permanent control of the Canadian unit’s assets, adding that it is asking the attorney general of Canada to petition for a winding-up order.
“By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch’s creditors,” Peter Routledge, the superintendent of financial institutions, said in a statement.
U.S. authorities were preparing “material action” on Sunday to shore up deposits in Silicon Valley Bank and try to stem any broader financial fallout from the bank’s sudden collapse, sources familiar with the matter told Reuters.
OFSI said the U.S.-headquartered bank has operated in Canada since 2019 as a foreign bank branch based in Toronto. Its business in Canada is primarily lending to corporate clients, and the branch does not hold any commercial or individual deposits in Canada.
The Canadian unit had C$435 million ($315.33 million) in secured loans at the end of last year, more than double the amount at the end of 2021, according to regulatory filings.
According to a Bloomberg report, the failure of SVB Financial Group dealt another blow to Canadian advertising-tech firm AcuityAds Holdings Inc, which revealed that almost all of its cash is held at the now-insolvent bank.
($1 = 1.3795 Canadian dollars)