United States Records Two Bank Failures in Three Days

•Nigeria’s Signature Bank: We have no affiliation with collapsed New York financial institution

New York-based Signature Bank has been closed by regulators in the country – the third largest failure in United States banking history.

The development came two days after US authorities shut down Silicon Valley Bank in a collapse that stranded billions in deposits, according to Reuters.

But Nigeria’s Signature Bank Limited yesterday, clarified that it does not have any affiliation with Signature Bank, New York, that was shut down on Sunday.

The Federal Deposit Insurance Corporation (FDIC) in the United States took control of Signature, which had $110.36 billion in assets and $88.59 billion in deposits at the end of last year, according to New York state’s Department of Financial Services.

All of the depositors of Signature Bank and Silicon Valley Bank would be made whole, and, “no losses will be borne by the taxpayer,” the US Treasury Department and other bank regulators said in a joint statement.

Signature’s failure followed Silicon Valley Bank’s Friday shutdown, the second largest in US history behind Washington Mutual, which collapsed during the 2008 financial crisis.

Investors were unnerved by the speed at which startup-focused SVB, the 16th largest lender in the US, was toppled by customer withdrawals.

The episode last week erased more than $100 billion in market value from US banks, prompting swift action from government officials over the weekend to try and restore confidence in the financial system.

The FDIC established a “bridge” successor bank on Sunday enabled customers to access their funds today. Signature Bank’s depositors and borrowers will automatically become customers of the bridge bank, the FDIC said.

The regulator named former Fifth Third Bancorp chief executive Greg Carmichael as CEO of the bridge bank.

Signature was a commercial bank with private client offices in New York, Connecticut, California, Nevada and North Carolina, and had nine national business lines including commercial real estate and digital asset banking.

As of September, almost a quarter of its deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion.

Signature Bank had announced in February that its chief executive officer, Joseph DePaolo, would transition into a senior adviser role in 2023 and would be succeeded by the bank’s chief operating officer, Eric Howell.

DePaolo has served as president and CEO since Signature’s inception in 2001.

The bank had a long-standing relationship with former President Donald Trump and his family, providing Trump and his business with checking accounts and financing several of the family’s ventures.

Meanwhile, Nigeria’s Signature Bank Limited has clarified that it does not have any affiliation with Signature Bank, New York.

The financial institution disclosed this in a statement made available to THISDAY yesterday.

It explained: “The attention of the bank has been drawn to recent news surrounding the closure of Signature Bank, New York, by US financial regulators on Sunday, March 12, 2023.

“For purposes of clarity, we wish to inform the general public that Signature Bank Limited has no affiliation, relationship, or connection (business or otherwise) with Signature Bank, New York, or any other bank outside of Nigeria.”

Signature Bank Limited is a wholly-owned Nigerian Bank that officially opened to customers on November 21, 2022, with its Head Office in Abuja.

“Signature Bank Limited has put in place robust technology and digital banking channels that will ensure customers can access its services from the comfort of their homes, offices, or at leisure.

“Signature Bank Limited is overseen by a deeply experienced and renowned Board of Directors led by Dr. Mutiu Sunmonu. Signature Bank Limited is committed to deliver banking to every Nigerian’s doorstep through digital channels and a focus on service excellence and customer centricity. We believe that the individuality and uniqueness of every customer should be celebrated,” the statement added.