First Citizens, one of the U.S. largest regional banks, is buying large pieces of Silicon Valley Bank more than two weeks after the lender’s collapse sent tremors through the banking system. The Federal Deposit Insurance Corp. said First Citizens is acquiring all of Silicon Valley Bank’s deposits, loans and branches. The purchase includes $56.5 billion in deposits and about $72 billion of SVB’s loans at a discount of $16.5 billion. Some $90 billion of SVB’s securities will remain in receivership. Regulators took control of Santa Clara, Calif.-based SVB on March 10. The collapse sparked a panic that led to the weekend failure of Signature Bank and a dramatic intervention by financial regulators aimed at easing fears that depositors would flee smaller lenders. The sale represents a milestone in regulatory efforts to clean up after two of the largest bank failures in history, at a time when investors are on edge about the health of the global financial system. First Citizens, based in Raleigh, N.C., was the 30th-largest U.S. bank as of Dec. 31, 2022, with $109 billion in assets, according to the Federal Reserve. Monday’s deal would put the lender in the top 25 U.S. banks in terms of assets. The FDIC agreed to share any of First Citizens’ losses or potential gains on SVB’s commercial loans. Overall, the FDIC estimated the failure of SVB will cost a federal insurance fund it oversees about $20 billion, or roughly 10% of the bank’s assets before its failure. First Citizens’ stock surged $313.06, or 54%, to $895.61 while shares of First Republic Bank climbed $1.46, or 12%, to $13.82.

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On Monday, the Swiss stock market was driven by strong gains of heavyweight Novartis. The SMI advanced 1.4 per cent to 10,786 points. Among the 20 SMI stocks, there were 16 price gainers and 4 price losers. 53.24 (previously: 86.4) million shares were traded. The pharmaceutical company Novartis reached the primary endpoint during an interim analysis in a study evaluating the breast cancer drug Kisqali. Kisqali has been shown to reduce the risk of recurrence when used in combination with endocrine therapy in patients suffering from certain types of early breast cancer, the group reported. The stock leapt 7.7 per cent. Meanwhile, shares of rival Roche slipped 0.6 per cent. Other shares from the healthcare sector were also in demand. Lonza gained 1.8 per cent and Sonova 1.7 per cent. Alcon advanced 2.2 per cent. UBS and Credit Suisse shares rose 1.1 and 0.5 per cent respectively. Meanwhile, Swiss financial market regulator Finma is examining the extent to which current Credit Suisse management can be held accountable for the problems that ultimately led to its takeover by competitor UBS in a bailout. Shares of Nestle, the third index heavyweight along with Novartis and Roche, slipped 0.1 per cent. Shares of ABB (-1.2%) and Givaudan (-1.0%) traded ex-dividend.

European stocks traded in positive territory on Monday as investors welcomed signs that recent anxiety surrounding the banking sector is waning. The Stoxx Europe 600 index closed up 1.1% at 444.7 points. In Paris, the CAC 40 and the SBF 120 advanced by 0.9% each. The DAX 40 in Frankfurt gained 1.1% and the FTSE 100 in London climbed 0.9%. As a sign that fears are easing, Deutsche Bank shares rebounded by 6.2% on Monday in Frankfurt. European banking stocks also rallied. BNP Paribas jumped 2.6% and Crédit Agricole SA added 0.9%, while Société Générale rose 0.3%. In Frankfurt, Commerzbank climbed 3.8%. Orpea, a group of retirement homes and clinics (-9%), announced the initiation of an accelerated safeguard procedure. The European Commission has authorised the takeover of Elior (+2.3%) by Derichebourg (-1.6%), a service and recycling group. The renewable energy producer Neoen (+1.2%) reported the success of its €750 million capital increase. The operation should enable the group to reach its target of 10 gigawatts (GW) of capacity in operation or under construction by the end of 2025 and to accelerate its development in storage. JPMorgan upgraded its recommendation for Plastic Omnium's shares from "underweight" to "neutral" (+3.9%) and increased its target price from €16 to €17.

The Dow Jones Industrial Average climbed Monday as concerns about the health of the banking sector ebbed and First Citizens agreed to buy much of Silicon Valley Bank. The blue-chip index rose 194.55 points, or 0.6%, to 32432.08, while the broad-based S&P 500 gained 6.54 points, or 0.2%, to 3977.53. The technology-heavy Nasdaq Composite slipped about 55.12 points, or 0.5%, to 11768.84. After weeks of turmoil in the banking industry, First Citizens’ deal to buy large parts of Silicon Valley Bank lifted shares of U.S. regional banks, a group that has come under intensifying pressure following SVB’s collapse more than two weeks ago. Other regional lenders advanced as well, with PacWest Bancorp up 33 cents, or 3.5%, to $9.88, and Western Alliance Bancorp up $1, or 3%, to $34.05. Blackbaud shares jumped 11% to 63.93 dollars as the board of directors of the cloud software company rejected a takeover bid of 3.78 billion dollars, or 71 dollars per share, from the Clearlake Capital Group fund, which already owns 18.3% of its capital. Carnival (-4.8%) provided financial forecasts that were deemed disappointing despite higher-than-expected results in the last quarter, driven by business close to its pre-pandemic level. On the economic front, investors are looking ahead to this week’s U.S. and eurozone inflation data for more clues on the path of monetary policy. On Friday, the Commerce Department is set to release figures on U.S. household spending and income in February, a key inflation reading that is closely watched by the Federal Reserve.

Asian stocks were mixed. Japan’s Nikkei 225 remained almost unchanged at 27,443 points, and the Shanghai Composite also barely moved. The Kospi in Seoul and Hong Kong’s Hang Seng Index, on the other hand, increased by up to 0.7 per cent.

U.S. government debt yields rose sharply on Monday amid reduced demand for the safety of government paper as tensions in the banking sector eased, while money-market participants scaled back bets the Federal Reserve will leave rates unchanged at its next meeting in May. The 10-year Treasury note gained 17 basis points to 3.542%. The 2-year Treasury note jumped 24 basis points to 4.203%.

Citi raises UBS target to CHF 26 (24) - Buy

RBC lifts Zurich Airport target to CHF 170 (160) - Sector Performance

CS lowers Hellofresh target to EUR 21 (26) - Neutral

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