HSBC buys UK arm of Silicon Valley Bank after collapse – latest updates

HSBC and the Treasury said customers of SVB UK will be able to access their deposits and banking services as normal following the sale to HSBC for a nominal sum of £1.

There had been mounting worries that the collapse of SVB – the second-largest bank failure in history – could also have sent shockwaves through the technology and life sciences sector in the UK, with many of those firms customers of the bank’s British business.

SVB UK had around £6.7 billion of deposits and loans of about £5.5 billion as at Friday last week, while its balance sheet stood at £8.8 billion, according to the Bank of England.

But the Bank said the “scale of the deterioration of liquidity and confidence means that, in the view of the Bank and the PRA, the position was not recoverable”.

“Therefore, the Bank of England decided, in consultation with HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), to use the resolution powers for stabilising failing banks that were brought in following the financial crisis,” it added.

The UK’s start-up sector could have been “decimated” without HSBC decision to rescue the UK division of Silicon Valley Bank, an expert has said.

Russ Shaw, of London Tech Advocates, said there was a “collective sight of relief” this morning after the move was announced.

More comments from Mr Shaw below:

In a statement, the BofE said: “The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC).

“HSBC is authorised and supervised by the PRA and the FCA.

“This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.

“The Bank and HMT can confirm that all depositors’ money with SVBUK is safe and secure as a result of this transaction. SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.

“Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal. SVBUK staff remain employed by SVBUK, and SVBUK continues to be a PRA/FCA authorised bank.”

Chancellor Jeremy Hunt has confirmed that failed lender Silicon Valley Bank has been sold to HSBC.

In a tweet, he said: “This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.

“Deposits will be protected, with no taxpayer support.

“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”

The government and the Bank of England have “facilitated a private sale” of Silicon Valley Bank UK to HSBC, with “no taxpayer support”, chancellor JeremyHunt said.

We’ll have more on this breaking story as it comes in.

At least 200 UK tech companies are at “serious risk” from the collapse of the British division of Silicon Valley Bank.

Rishi Sunak and the chancellor have held emergency talks with the governor of the Bank of England Andrew Bailey this weekend to come up with a cash lifeline for affected firms as the bank goes into insolvency.

Meanwhile, a number of potential buyers circle the failed lender.

Banking giants HSBC and JP Morgan were among several parties exploring buying the bank’s British operations, Sky News reported. Both declined to comment.

Adam Forrest reports:

Good morning and welcome to The Independent’s live businesses coverage.

The government is set to make an announcement after the British division of Silicon Valley Bank collapsed, putting 250 UK tech firms at “serious risk”.

Stay tuned for all the latest updates.