Former VP at SVB Financial Group
- SVB Financial Group’s (NASDAQ: SIVB) operating environment and key considerations for ongoing performance
- Exposure to tech underperformance and impact on credit losses, cash burn and loan growth outlook
- Deposit base pricing and growth commentary
- SVB’s competitive positioning against regional banking peers, commercial banks and fintechs
Can you give us an update on SVB Financial Group’s operating environment? How do you see it as having changed since we last spoke [see SVB Financial Group – Company Update & Performance Outlook – 5 August 2022]? What 2-3 key trends or drivers do you think we should be monitoring?
How should we be interpreting the hiring of Kim Olson as Chief Risk Officer in January 2023?
Is there anything between the lines that we should be interpreting regarding Olson’s appointment? Might SVB’s compliance standards in 2022 not have been as high as the company has advocated for?
How would you grade the performance of SVB management in 2022, particularly in withstanding the macroeconomic headwinds?
SVB management essentially revised its FY22 outlook in every single quarter last year, despite playing in an industry with relatively predictable income expectations. How would you assess management’s shiftiness and what was the effect of that uncertainty on investors?
Would you call out management as being overly ambitious regarding anything mentioned in SVB’s Q4 FY22 earnings report?
Could you quantify your predictions for SVB’s loan losses over the next year?
You mentioned that SVB’s deposits have been dwindling lately or trending negatively. Do you anticipate any shifting in deposit pricing from the company to counter some of those withdrawals?
What sort of deposit rate growth do you anticipate over the next year if SVB management is pressed to increase that rate?
Do you see any chance of SVB looking to compete with rates offered by money markets or certificates of deposit?
How do you expect loan growth to play out for SVB over 2023?
What are your 2023 loan loss provisions and net charge-off expectations for SVB?
Do you think there is an opportunity for SVB to extend its product offerings in an attempt to diversify revenue away from net interest margins and as a means of fortifying possible non-interest income?
Can you elaborate on the VC environment, perhaps noting how current rates are impacting the outlook of performance or expectations going forwards for SVB Capital specifically?
Do you think it’s in SVB’s favour to move away from or de-risk its exposure to certain sectors?
How sustainable do you believe SVB’s branding or angling towards the innovation economy is during periods of economic uncertainty? Could we see any pull-back or a reinvention towards something more akin to a traditional, regional bank? Do you have any gut feeling that the company could start moving towards commercial real estate or commercial and industrial in any world?
What can you tell us about SVB’s competitive landscape? What plays do you think might pose the most risk in terms of encroaching on the company’s market share?
Do you expect any of the more pure-play commercial banks that you mentioned, such as CIBC, Comerica and PacWest, to look to take a page out of SVB’s book, given their performance over the last decade – notwithstanding 2022? Might these banks look to enhance some of their offerings to be more akin to SVB’s?
Where do you think SVB is able to remain competitive with JP Morgan and keep the New York bank at least slightly on the edge, if not in a specific cohort of players?
What do you think is missing from SVB’s offerings from a product perspective?
Based on its history, do you think SVB has the propensity to make tech advancements in-house? Do you see the company hiring a third party or, as you suggested, acquiring a player with a better tech stack?
For a bank pointed towards the innovation economy, it seems that SVB’s culture is a little – for lack of a better word – old. How would you assess that?
Beyond SVB’s debt capability flexibility, which you mentioned previously, is there anything you would highlight as making the company unique and appealing in terms of its debt offerings?
Can you outline SVB’s historical M&A strategy? What does the company look for when acquiring? Which of its product competitors that you mentioned – such as Brex, Ramp, Mercury and Pipe – might it make sense for it to potentially acquire to widen out its product portfolio instead of developing something in-house?
You mentioned JP Morgan’s acquisition of Frank in September 2021, which was really fraught with a lack of due diligence, with a lot of the acquiree’s users turning out to be fake accounts. Are question marks regarding actual user bases not a concern for SVB when it looks at acquiring fintechs?
What would you highlight as the 2-3 key regulatory or compliance issues affecting SVB as we tread through 2023?
Do you think SVB is well-capitalised to extend any potential regulation increasing minimum capital requirements?
How do you think dividends will trend at SVB in the next quarter or two?
Do you anticipate share buybacks resuming over the next few quarters at SVB?
Could you anticipate any methods that SVB might use should it look to reduce its expense line overall? Can you foresee any cost-cutting initiatives?
Do you see any of SVB’s specific product verticals as having proven themselves obsolete or less additive to overall top-line growth and that the company should probably be moving away from?
It seems that there’s an opportunity in non-interest income that SVB has yet to act on. Would you agree with that assessment?
What are your 1-3-5-year outlooks for SVB? What are the best-, base- and worst-case scenarios for the company going into 2023? What metrics or milestones do you think the investment community should be monitoring?
Is there anything else worth highlighting about SVB or its operating environment that we haven’t already covered? Is there anywhere that you feel you hold a contrarian view?
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