- The Bank of England announced on Friday that, “in the absence of meaningful further information”, it would place Silicon Valley Bank UK in insolvency proceedings.
- More than 200 companies – savers at SVB UK – wrote to the British Treasury on Saturday asking for help.
- HSBC UK announced at 7am London time on Monday that it was buying Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7 billion in deposits.
HSBC came to the aid of Silicon Valley Bank UK in a crucial deal for the entire banking sector. But if you had told the CEO a few days in advance that this was going to happen, he wouldn’t have believed you.
“I went about my normal business on Friday. If someone had said to me [that] we were going to take over another bank in two or three days, I wouldn’t have believed it,” Ian Stuart, CEO of HSBC UK Bank, told CNBC’s “Squawk Box Europe” on Thursday.
It all went very quickly. Silicon Valley Bank — a U.S. lender with clients primarily in the technology and healthcare startup world — was deemed insolvent by U.S. regulators on Friday. That set alarm bells ringing on the other side of the pond, where SVB had a subsidiary.
Consequently, the Bank of England announced on Friday that, “in the absence of meaningful further information”, it would place Silicon Valley Bank UK in insolvency proceedings.
“Saturday morning I woke up, saw the announcement and just after 10:30am we were in touch with the regulator who offered our help, myself and our global CEO Noel Quinn were both in touch. And it got a little quiet I think at that point we tried just to provide whatever help possible,” Stuart said.
More than 200 companies – savers at SVB UK – wrote to the British Treasury on Saturday asking for help. They said some would not be able to meet payroll deadlines without accessing their deposits with SVB UK.
“We got early access to the database on Sunday. We had about five hours to do due diligence and by about 6pm on Sunday – and we had a lot of meetings all day – as far as we’re concerned it was a competitive situation, and I can honestly say that even until about 10pm I still thought it was a competitive situation and around that time we were in close consultation with the regulator.”
Other financial institutions were also in the mix, assessing the opportunity to buy SVB UK, including OakNorth Bank, The Bank of London and Abu Dhabi-based investment firm Royal Group.
It’s a great opportunity.
CEO of HSBC UK
“It wasn’t until … in the wee hours of Monday morning that we thought, ‘Okay, I think we’ve got a couch,’ and we started preparing communications at that point,” Stuart said.
HSBC UK announced at 7am London time on Monday that it was 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, good quality products and yes, five hours is not a lot of time to do due diligence, but what we decided was, ‘Are there black holes? No, not that we could see,” said Stuart.
“Was it worth it – your words, not mine – a gamble. We thought it was a sensible approach, we didn’t ask for government support, we didn’t ask 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 great opportunity,” he said.