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Naguib Sawiris, chairman of Orascom Financial Holding as well as the founding partner of the HOF direct investment fund specializing in technology, revealed in an interview with Al-Arabiya that the recent collapse of U.S. bank Silicon Valley Bank (SVB) has prompted his firm to move all money and accounts from small banks to J.P. Morgan and Merrill Lynch.
In an interview with Al-Arabiya, Sawiris, who ranks as the second-richest man in Egypt and holds an estimated wealth of $3.3 billion, largely derived from investments in the industrial, real estate, construction, and tech sectors, made this statement.
“We have succeeded in transferring all our money and accounts from small banks to J.P. Morgan and Merrill Lynch,” Sawiris declared during the interview with Al-Arabiya, an international Arabic news television channel based in Dubai.
Although Naguib Sawiris has no direct exposure to Silicon Valley Bank, his invested companies do
Sawiris revealed that one of his firms, HOF, had sent messages to companies in which it invests in the United States and around the world, urging them to transfer their deposits and money from Silicon Valley Bank to other financial institutions.
He further stated that HOF has many accounts and funds in various banking institutions but not in Silicon Valley Bank. Despite not having any direct exposure himself, his firm may have indirect exposure as it invests in more than 100 emerging companies in United States and abroad.
According to Sawiris, about 30 percent of the companies in which HOF invests had exposure to SVB, and around 5-6 of those companies failed to withdraw their money. However, they have recently been offered the opportunity to reclaim around 80 percent of the value of their deposits.
JPMorgan and other big U.S. banks see influx of deposits following SVB’s collapse
In the wake of Silicon Valley Bank’s collapse, the second-largest bank failure in U.S. history, Sawiris is one of many customers who have flooded JPMorgan Chase & Co and Citigroup Inc with deposits.
Despite the U.S. government implementing emergency measures to prevent more bank failures, depositors are still transferring their accounts to larger banks or investing in money market funds.
The Federal Deposit Insurance Corporation has provided protection for deposits up to $250,000, however, deposits over this amount, which accounted for 85 percent of SVB accounts, remain at risk.
