HSBC has saved Silicon Valley Bank UK from collapse by striking a last-minute deal to buy the troubled lender’s business for £1.
The acquisition followed overnight talks between Downing Street, the Bank of England, and HSBC bosses, including CEO Noel Quinn, as authorities rushed to protect the finances of SVB UK’s 3,500 customers.
The takeover, which averted a crisis that threatened chaos across Britain’s tech sector, will override the Bank of England’s initial decision to place SVB UK into insolvency after a run on the lender.
The bank’s collapse was originally sparked by fears over a multibillion-pound shortfall on the US parent company’s balance sheet, which led to its closure and assets seizure by authorities on Friday.
Shadow Chancellor Rachel Reeves MP welcomed the news, saying: “That SVB has a buyer will be a relief to the entrepreneurs and the thousands of people working in the tech and start-up sectors, who woke up facing huge uncertainty this morning. Tech and life sciences are vital to getting our economy growing again.”
Rob Cossins, CEO of AI-powered data platform Scribe, said: “HSBC acquiring SVB UK is an excellent outcome for the UK tech ecosystem. Many UK technology companies were faced with existential risk, so I’m glad that all the relevant stakeholders appreciated the importance of protecting deposit-holders in the UK’s most innovative sector. Founders that were looking unable to pay wage bills this week are now protected, and thousands of jobs have been saved.”
Jukka Väänänen, CEO of the free PR platform Newspage, cautioned that SVB’s collapse would up the fear quotient among tech and startup companies, and fear inhibits growth, which is what the economy needs desperately right now. He added that the tech sector was in a precarious position, and it would be naive to think that SVB UK was the only tech bank affected by interest rate hikes. Questions were once again being raised about risk management in the banking sector.
