LONDON, March 27 (Reuters) - Several mid-tier U.S. lenders' share prices rose sharply on Monday in premarket trade, after a buyer emerged for large chunks of embattled Silicon Valley Bank's deposits and loans, which helped inject some calm into fragile markets.
SVB was the largest bank since the 2008 financial crisis to collapse when California regulators closed the bank on March 10, which sparked major turmoil in the banking sector globally.
On Monday, First Citizens BancShares (FCNCA.O) said it bought all the loans and deposits of failed SVB. Under the deal, unit First–Citizens Bank & Trust Company will assume SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion.
The Federal Deposit Insurance Corporation (FDIC), which took control of SVB earlier this month, said in a statement it has received equity appreciation rights in First Citizens BancShares stock with a potential value of up to $500 million as part of the deal.
In thin trading, First Citizens shares were up 10.7% in premarket, while share in other U.S. lenders also rose.
First Republic Bank (FRC.N) jumped 25% after a report said U.S. authorities are considering more support for banks, which could give the embattled regional lender more time to shore up its balance sheet.
Shares in Keycorp (KEY.N), and Western Alliance (WAL.N), were indicated 6.2% and 5.8% higher, while Pacific West Bancorp shares surged 8.08% in premarket.
Shares of major U.S. banks JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America (BAC.N) advanced between 0.8% and 1.4%.
"There is relief that First Citizen Bank, one of America’s largest family-controlled banks, has come to the rescue," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
"A calm of sorts has descended on the banking sector but hopes that this move will see significant stability return may be short-lived," she added.
European banking shares (.SX7P) opened sharply higher with the SVB deal helping ease some of the anxiety in the sector. But banks trimmed those gains, last up 1% following a 3.8% tumble on Friday led by anxiety around Deutsche Bank (DBKGn.DE).
Last week, a sharp jump in Deutsche Bank's credit default swaps, a type of insurance for bondholders, had exacerbated worries about the health of European banks.
