Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Insider UK
Insider UK
Business
AP reporters & Holly Williams, PA Business Editor & Alistair Houghton

Silicon Valley Bank UK arm is sold to HSBC with all deposits 'safe and secure'

The UK arm of collapsed American lender Silicon Valley Bank has been sold to HSBC - with the Bank of England saying all deposits are now 'safe and secure'.

The bank's collapse sparked fears for the future of many tech and scientific firms that banked with it. But this morning Chancellor Jeremy Hunt confirmed all customer deposits have been protected under the deal, with no taxpayer cash involved.

In a statement, Chancellor Jeremy Hunt said: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.

“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.

READ MORE: SNP tells Jeremy Hunt to use Budget to ‘put money in people’s pockets’

“Today the Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.

“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”

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.”

A survey of 31 venture capital funds, which hold thousands of investments in UK tech and science firms, found that 34% of their portfolio companies – a total of 336 – have accounts with SVBUK.

More than 200 of those now face short or long-term cashflow risk, according to the data from BVCA – the industry body representing venture capital investors.

Around £2.5 billion of capital from these firms is locked in the lender.

Meanwhile on Sunday in the US, the Treasury Department, Federal Reserve and FDIC said all Silicon Valley Bank clients would be protected and able to access their money.

They also announced steps that are intended to protect the bank’s customers and prevent additional bank runs.

The agencies said: “This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth."

Under the plan, depositors at Silicon Valley Bank and Signature Bank, including those whose holdings exceed the $250,000 insurance limit, will be able to access their money on Monday.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.