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City National Aims at Silicon Valley

September 19, 2000|Bloomberg News

City National Corp. said it plans to open an office in Palo Alto next week to provide banking services to technology start-ups and wealthy entrepreneurs in Silicon Valley. The Beverly Hills-based bank hopes to capitalize on the record flow of venture capital into young companies and the resulting demand for banking and money-management services. But Santa Clara-based Silicon Valley Bank dominates the market for lending to tech start-ups, with an estimated 60% to 70% share of the roughly 25 markets in which it operates. Shares of its parent, Silicon Valley Bancshares, rose 359% during the last year, compared with 22% for City National. City National shares fell 31 cents to close at $39.31 on the NYSE, and Silicon Valley slid $2.73 to $54.25 on Nasdaq. City National, founded in the 1950s as a bank for movie stars, aims to attract clients by offering personal wealth-management services to executives at the same time as it provides commercial banking services to their companies. The new Palo Alto office extends City National's northward expansion, which in February acquired Pacific Bank in San Francisco. The bank began focusing on technology three years ago, starting with Southern California.

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