Around 800 employees working at Silicon Valley Bank’s India office face uncertainty after the bank collapsed over the weekend following a two-day long bank run.
The bank has a location in the Manyata Embassy Business Park in Bangalore. According to people who spoke to Business Today, the bank had 800 staff working there. As there has been no formal information about the bank’s future or their careers there, they are currently facing difficult times.
“Everything is extremely uncertain. Most of us were already working from home so we did not go to the office today as well,” an employee said on condition of anonymity.
Another employee said that they had some misgivings about the rapid interest rate hikes by the US Federal Reserve and its impact on the bank’s financial health.
“I am a risk advisor myself. So, I understand the financial consequences of the central bank’s decisions. The rapid rate hike by the Fed was concerning me,” the employee said.
Interestingly, the top brass of the bank including CEO, CFO, CMO and general counsel sold parts of their shareholding in the company.
Greg Becker, the CEO of the company, sold over 12,450 shares for $ 3.57 million on February 26. The CFO of the bank, Daniel Beck sold $0.57 million worth of stocks on the same day. Michelle Draper, the CMO, first sold $20,000 worth of shares and in a second transaction sold 809 shares for $ 0.19 million.
The employees facing uncertainty are now connecting over LinkedIn to support each other virtually.
“We are all trying to help each other on LinkedIn in this difficult time. Our company culture has always been good and it is all because of the employees who build culture,” an employee said.
The Federal Deposit Insurance Corp (FDIC) took over the bank and has offered the employees 45 days of employment at 1.5 times their salary, Reuters reported on Sunday. However, it remains unclear if this will be applicable to employees in India.
Silicon Valley Bank had been a crucial lender for startups across the world. The bank also held huge deposits belonging to venture capitalists as well as startups. The bank’s deposits went up to $189.20 billion in 2021 from $102 billion.
After being swamped with liquidity, the bank bought over $80 billion in mortgage-backed securities (MBS) with the deposits for its hold-to-maturity (HTM) portfolio, with an average yield of 1.56 per cent.