HSBC swoops in to rescue UK arm of Silicon Valley Bank

BBC: HSBC has swooped in to buy the UK arm of collapsed US Silicon Valley Bank (SVB), bringing relief to the UK tech firms, who warned they could go bust without help.

Customers and businesses, who had been unable to withdraw their money, will now be able to access it as normal.
The Treasury said the deal, which was thrashed out with HSBC through the night to be done before trading resumed yesterday, involved no taxpayer money.

HSBC said it paid just £1 for the SVB’s UK arm after it failed on Friday.

Silicon Valley Bank - which specialised in lending to technology companies - was shut down by the US regulators on Friday in what was the largest failure of a US bank since 2008. Its collapse sent shockwaves across the tech industry over the possible impact it could have on businesses, with some firms telling the BBC they could go bust if deposits were not secured.

The deal came after all night talks involving Chancellor Jeremy Hunt, the prime minister, Bank of England governor, HSBC bosses and civil servants to try to find a solution before firms began trading again yesterday morning.

The Bank of England said no other UK banks had been “materially affected” by SVB’s collapse and said the wider banking system remained “safe, sound and well capitalised”.

Although the UK arm of SVB was small with just over 3,000 business customers, its collapse would have presented a risk for a sector, which the government views as pivotal to the UK’s future economic success. Hunt said such firms were often “fragile”. “Some of them only had bank accounts with SVB UK and so for that reason we were faced with a situation where could have seen some of our most important companies, our most strategic companies, wiped out and that would have been extremely dangerous,” he added. But Hunt insisted there was “never a systemic risk to our financial stability in the UK”. Sebastian Weidt, Chief Executive of Universal Quantum, a tech company, which employs about 40 people and held all its funds with SVB, said the deal was a “huge relief”. He told the BBC the last 48 to 72 hours had been “unbelievably stressful” and said while his company had been trying to make plans to mitigate the potential impact, had a deal not been made it would have been “pretty detrimental to the whole sector”.