- The Bank of England announced on Friday that it would place Silicon Valley Bank UK in bankruptcy proceedings “without meaningful further information”.
- More than 200 companies – depositors in SVB UK – wrote to the UK Treasury on Saturday asking for help.
- HSBC UK announced at 7am London time on Monday that it is buying Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7 billion in deposits.
HSBC bailed out Silicon Valley Bank UK in a crucial deal for the entire banking sector. But if you had told his CEO – just days earlier – that this was going to happen, he would not have believed you.
“I went about my normal business on Friday. If someone had said to me [that] We’d be buying another bank in two or three days, I wouldn’t have believed it,” HSBC UK Bank CEO Ian Stuart told CNBC’s Squawk Box Europe on Thursday.
It all happened very quickly. Silicon Valley Bank — a US lender with clients mostly in the tech and healthcare startup world — was declared insolvent by US regulators on Friday. That rang alarm bells across the pond, where SVB had a subsidiary.
As a result, the Bank of England announced on Friday that it would place Silicon Valley Bank UK in bankruptcy proceedings “without meaningful further information”.
“Woke up on Saturday morning, saw the announcement and just after 10:30am we were in contact with the regulator who offered our help, myself and our global CEO Noel Quinn both in touch. And it went a bit quiet I think at that point we were just trying to offer every possible help,” Stuart said.
More than 200 companies – depositors in SVB UK – wrote to the UK Treasury on Saturday asking for help. They said some could not meet payroll deadlines without accessing their deposits with SVB UK.
“We got access to the database on Sunday morning. We had about five hours to do the due diligence and around 6pm on Sunday – and we had a lot of meetings throughout the day – it was a competitive situation for us. and I can honestly say that even up to 10-11pm I still thought it was a competitive situation and around that time we were in really close dialogue with the regulator.”
Other financial institutions were also in the mix, exploring an opportunity to buy SVB UK, including OakNorth Bank, Bank of London and Abu Dhabi-based investment firm Royal Group.
It’s a wonderful opportunity.
Jan Stuart
CEO of HSBC UK
“It wasn’t until … the early hours of Monday that we were like, ‘Right, I think we have a bank,’ and we started preparing the communications at that point,” Stuart said.
HSBC UK announced at 7am London time on Monday that it is buying Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7 billion in deposits.
“We have a UK bank that is well run, very good people, high quality products and yes five hours isn’t a lot of time for due diligence but we decided, ‘Are there black holes? No, not that we can see,'” Stuart said.
“Was it – your words, not mine – worth a gamble. We thought it was a sensible approach, we weren’t asking for government support, we weren’t asking for anything out of the ordinary,” he said, adding that the deal will help HSBC accelerate its strategic plan by two or three years.
“It’s a wonderful opportunity,” he said.