HSBC CEO has doused fears that Silicon Valley Bank UK will suspend or not adequately focus plans on helping startups.
The CEO of HSBC UK has said that Silicon Valley Bank UK will continue its regular business of serving startups regardless of new ownership. Ian Stuart noted that Silicon Valley Bank will maintain its processes and business without disruption.
At the Money 20/20 fintech conference in Amsterdam, Stuart assured CNBC’s Arjun Kharpal of protecting Silicon Valley Bank. He said:
“We are going to keep it ringfenced within our own ringfenced bank. It will have its own board, it will have its own risk policies. We are going to protect what it’s got today.”
The HSBC CEO was responding to general anxiety about the takeover. Many worry that a traditional financial institution like HSBC is not in the best position to serve Silicon Valley Bank UK. The worry is specifically about HSBC financing small businesses and tech startups like Silicon Valley did.
Stuart has assured that customers will enjoy the same services without any difference. He stated:
“Our plan is we’ll take it from seed funding all the way through to IPO. Customers will never have to go outside of that network to meet their funding requirements.”
Furthermore, the CEO spoke on strategy. He said the plan is to “be global very, very quickly,” with infrastructure in Israel, the Middle East and Asia, the US, and the UK. According to a Sky News report, HSBC will rebrand Silicon Valley Bank UK as “HSBC Innovation Banking.” The report states that HSBC will likely announce the new brand on June 12 as the London Tech Week kicks off.
HSBC Acquired UK Arm of Silicon Valley Bank for 1 Pound
HSBC Silicon Valley acquired Silicon Valley Bank UK following the Silicon Valley parent’s recent collapse. At the time of the official London Stock Exchange announcement, Silicon Valley Bank UK had around £6.7 billion in deposits and about £5.5 billion in loans. The estimate for the bank’s tangible equity was £1.4 billion. In addition, the announcement said the bank had £88 million in profit before tax for the financial year ending December 31, 2022.
HSBC was one of a few institutions interested in Silicon Valley Bank UK. Global clearing organization Bank of London also sent an offer to the failed bank and submitted proposals to the Bank of England and the Treasury. Reportedly, SoftBank subsidiary OakNorth Bank was also interested in the acquisition, along with Abu Dhabi investment and holding company ADQ.
North Carolina-based First Citizens Bank acquired Silicon Valley Bank in the US following the collapse. A US Federal Deposit and Insurance Corporation (FDIC) statement noted that First Citizens would also acquire all loans and deposits. The statement also said that the Silicon Valley Bank failure will cost the FDIC’s Deposit Insurance Fund (DIF) around $20 billion.
First Citizens planned to reopen at least 17 former Silicon Valley branches as First Citizens Bank and Trust Company.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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