The failed Silicon Valley Bank (SVB) will be mostly taken over by First Citizens, a North Carolina lender, and its collapse will cost $20bn (£16bn) in deposit insurance payouts, US regulators have said.

First Citizens will take on all $119bn in deposits and loans from the entity set up after SVB’s collapse earlier this month.

The collapse of SVB has triggered turmoil in the global banking sector, as investors query whether new systemic problems have built up in the years since the global financial crisis of 2008. Credit Suisse was forced into a takeover by Swiss rival UBS last week after its share price tumbled.

The failure of SVB will cost about $20bn, according to the Federal Deposit Insurance Corporation (FDIC), a US government agency that insures bank deposits up to a certain amount. Those costs will be borne by the deposit insurance fund, which is paid for by banks whose deposits are insured, it said on Monday.

SVB had grown into a big lender by targeting startups and fast-growing companies in the Silicon Valley tech sector, with operations in other countries including the UK. However, its customers started withdrawing their deposits en masse as it emerged that the value of SVB’s bonds had fallen because of rising interest rates. The Biden administration stepped in and said it would cover all deposits at the bank – including those not federally insured – fearing that contagion would spread across the sector.

The SVB entity had about $167bn in total assets and about $119bn in total deposits on 10 March, the FDIC said. First Citizens bought about $72bn of the assets of the failed bank at a discount of $16.5bn. First Citizens will also take over and run the 17 SVB branches.

The UK government brokered a deal for HSBC to buy Silicon Valley Bank’s UK operations for £1 in a rescue deal two weeks ago.

First Citizens was founded in 1898 to serve North Carolina’s farmers. In 1935, RP Holding took over the leadership of the bank, and since then it has been run by his descendants. It survived the financial crisis of 2008 intact and since then, under the leadership of Frank B Holding Jr and his sister Hope Holding Bryant, it has grown through acquisitions. A $2bn deal last year to take over the business lender CIT Group pushed it into the top 20 US banks by assets, according to the company.

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About $90bn in SVB’s securities and other assets will remain under the control of the FDIC as it tries to minimise losses for depositors and investors.

The regulator has also entered into an agreement with First Citizens to cover some of the losses on loans held by SVB.

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