The global banking sector witnessed a bad start, Friday, with its shares falling on the stock exchanges as a result of concern about the difficulties faced by the American “SVB Financial Group”, which is a preferred partner for many technology companies.
David Benamo, director of investments at Axiom Alternative Investments According to an AFP report, this “limited panic” movement began in response to customers making huge withdrawals.
The primary reason is the announcement by SVB, the parent company of Silicon Valley Bank (SVB), on Wednesday, of measures to increase its liquidity by $2.25 billion, following the withdrawal of clients from it.
The shares of the American bank fell by 60 percent, in Thursday’s trading, and it fell by about 45 percent on Friday in pre-market trading.
On the Paris Stock Exchange, “Societe Generale” lost 4.96 percent to 25.40 euros, “BNP Paribas” 3.38 percent to 60.52 euros, and “Credit Agricole” 2.94 percent to 10.97 euros.
Elsewhere in Europe, German bank Deutsche Bank lost 9.85 percent of its value, while Commerzbank, Germany’s second largest bank, fell 6.12 percent. British Barclays shares declined by 3.83 percent, Italian Intesa Sanpaolo decreased by 3.06 percent, and Swiss “UPS” decreased by 4.45 percent.
In Hong Kong, HSBC and Standard Chartered lost more than 3 percent on Friday, and Hang Seng Bank lost more than 4 percent. The same trend was registered in Japan, where shares of the most prominent Japanese banks declined.
With the announcement of SVB’s difficulties and customers’ withdrawals, the general manager of the financial group urged customers “not to withdraw their deposits from the bank and not to spread fear or panic,” sources told the Wall Street Journal Thursday.
The group also hastily sold 21 billion dollars of financial stocks, resulting in an estimated loss of about 1.8 billion dollars.
