HSBC buys Silicon Valley Bank UK offering lifeline to tech sector

HSBC has acquired the UK arm of stricken Silicon Valley Bank (SVB), providing a vital lifeline for many UK tech firms that feared for their survival in the wake of the bank’s collapse.

The global banking giant bought the specialist tech bank for just £1 after the government and the Bank of England stepped in to “facilitate” a private sale after its collapse put hundreds of UK tech companies “at serious risk”.

Chancellor Jeremy Hunt confirmed that all customer deposits have been protected under the deal. All SVB UK services will continue to operate as normal and customers should not notice any changes.

Over the weekend more than 200 bosses of UK tech firms wrote to Hunt to ask for government intervention over what they said was “an existential threat” to the sector.

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The letter read: “This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.”

It said that the “majority of the most exciting and dynamic tech businesses” bank with SVB and have “no or limited diversity in where their deposits are held”.

HSBC group chief executive Noel Quinn said: “This acquisition makes excellent strategic sense for our business in the UK.

“It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally.”

This morning, many listed online retailers including Moonpig, Naked Wines and Music Magpie, had sought to reassure the market that they were unaffected by the crisis unfolding.

Naked Wines, which holds cash with SVB in the UK and USA and has it as a lender for its $60m asset-based credit facility, said that “day-to-day operations are unaffected and we don’t expect to incur any loss”.

Moonpig said that SVB UK is one of 10 lenders and insisted it had “significant liquidity headroom”.



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