A Silicon Valley Bank office in Napa, California, US, Monday, March 13, 2023.

David Paul Morris | Bloomberg | Getty Images

SVB Finance Group said on Friday it filed for court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets, days after its former unit Silicon Valley Bank was taken over by US regulators.

The move to open bankruptcy proceedings comes as emergency confidence-boosting measures have so far failed to allay fears of financial contagion.

Shares of major U.S. banks fell between 1.5% and 2% in premarket trading on Friday.

California regulators ended Silicon Valley Bank on Friday, making it the biggest collapse since Washington Mutual went bankrupt during the 2008 financial crisis.

The tech lender was forced to sell a portfolio of government bonds and mortgage-backed securities to Goldman Sachs at a loss of $1.8 billion after a surge in yields eroded value.

To plug that hole, it tried to raise $2.25 billion in common and preferred stock, but spooked customers pulled deposits from the bank, leading to outflows of $42 billion in one day.

Earlier this week, the defunct lender said it plans to explore strategic options for its businesses, including the holding company, SVB Capital and SVB Securities.

SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing, the company said Friday, adding that it planned to continue with the process of evaluating options for the companies, as well as its other assets and investments.

Reuters reported on Wednesday that the parent company was exploring seeking bankruptcy protection to sell assets.

The company said Friday it has about $2.2 billion in cash. It had $209 billion in assets at the end of last year.