Interview with SVB MD Andy Tsao: Rebuilding trust can’t happen overnight

Ritu Jha–

“Most of our clients didn’t close their bank accounts with us they just simply moved deposits elsewhere. Our message to them is come back and work with us again,” says Andy Tsao, managing director, Silicon Valley Bank.

Tsao, a known figure in the Indian American tech and startup industry, leads SVB’s Global Gateway and assists innovation companies in emerging markets with their US and international market expansion.

He manages SVB’s relationships with venture capital and private equity firms outside the US and also helps emerging market companies. He is also TiE Silicon Valley Charter Member and Asia America MultiTechnology Association (AAMA) Silicon Valley Co-President and Charter Member and serves on the West Coast Advisory Board for Colgate University.

Tsao talked to indica about the collapse of Silicon Valley Bank in March this year and the shockwaves not just in Silicon Valley but in India as well, and how he is working to bring back the lost customers.

READ: indica’s comprehensive coverage of Silicon Valley Bank collapse

The Federal Reserve came in to rescue, and First Citizens Bank Inc. entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase all of the assets and liabilities of Silicon Valley Bridge Bank on March 27 bringing it back into business.

“We are getting back to normal in terms of serving the innovation economy here in the US and what we do on my team which we call Global Gateway, is serve a number of international markets including cross-border India. We are approaching markets that we served in the past including India, Latin America, Australia, and New Zealand in the same way that we have in the past,” he said.

He quickly adds that “our team at the bank is largely the same.”

Tsao said, “Our products and services are the same and the proposition that we have over other banks is our expertise in working with startups. And my team understands the journey of cross-border Indian entrepreneurs as they come to the US market.”

SVB has two times the amount of liquidity after being acquired by First Citizens Bank after its sudden collapse in March 2023. First Citizens Bank acquired assets worth $110 billion, deposits of $56 billion, and loans of $72 billion, and entered into a loss-share agreement with the FDIC to provide further downside protection against potential credit losses.

Talking about what happened after the bank’s collapse, Tsao said: “In that first week or two people weren’t completely aware of the transition and that we became a different bank, a different legal entity – Silicon Valley Bank, a division of First Citizens Bank. So, we had to re-plug into the banking system and people within SVB, despite all the personal challenges that we all face, work night and day to get the bank functional.”

But, during those two weeks when SVB went through turmoil and collapsed, it was a nerve-wracking time for the bank authorities and employees too.

About SVB’s sudden collapse, he said: “It happened extremely quickly and there was no time to do anything. It was a surprise to most at the bank because it has always performed. SVB grew and performed very well financially over the years, and it was never an issue with our business model, which continues to do very well today. But it was obviously some issues around rapid increases in the interest rates and decisions we made in terms of duration or tenor of investments we made with excess deposits.”

“We’ve had the honor and privilege of serving the innovation community, whether it’s VCs and high growth tech founders for 40 years before the bank had problems. At the end of the day, the thing that happened is that we put our clients through stressful situations. At SVB. we always put our clients first, no matter what. Even though those were devastating moments for all of us at the bank, we felt even worse for our clients.”

What’s SVB’s plan of action regarding re-instilling trust? “Trust can be fragile,” Tsao said, “and obviously banks really are dependent on confidence and trust. We know that it’s not going to happen overnight, that we can rebuild trust. But I think when people begin to work with us again, they will recognize that quickly the experience that they’re familiar with. They’ll understand that the merger that we’ve had with First Citizens Bank provides us with 125 years of stability and diversification. We’re a more diversified company today.”

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