- The Bank of England announced on Friday that “without any meaningful further information” it would place Silicon Valley Bank UK into insolvency proceedings.
- More than 200 companies – depositors at SVB UK – wrote to the British Treasury on Saturday asking for help.
- HSBC UK announced on Monday at 7 London time that they bought Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7bn of deposits.
HSBC came to the rescue of Silicon Valley Bank UK in a landmark deal for the entire banking sector. But if you had told its CEO – just a few days in advance – that this was going to happen, he wouldn’t have believed you.
“I was going about my normal business on Friday. If someone had told me (that) we would be buying another bank within two or three days, I wouldn’t have believed it,” Ian Stuart, CEO of HSBC UK Bank , CNBC’s “Squawk Box Europe” told Thursday.
It was all very quick. Silicon Valley Bank – a US lender with clients mainly in the technology and healthcare startup world – was deemed insolvent by US regulators on Friday. It rang alarm bells across the pond, where SVB had a subsidiary.
As a result, the Bank of England announced on Friday that “in the absence of any meaningful further information” it would place Silicon Valley Bank UK into insolvency proceedings.
“Woke up on Saturday morning, saw the announcement and just after 10.30am we were in touch with the regulator who offered our help, both myself and our global managing director Noel Quinn. And it went a bit quiet I think at the time we tried just offering any help we could,” Stuart said.
More than 200 companies – depositors at SVB UK – wrote to the British Treasury on Saturday asking for help. They said some would not be able to meet pay deadlines without accessing their deposits with SVB UK.
“We got access to the data bank early on Sunday. We had about five hours to do due diligence and at about 6pm on Sunday – and we had lots of meetings during the day – for us it was a competitive situation. and I can honestly say , that even up to about 10, 11 p.m. at night, I still thought it was a competitive situation, and around that time we were in very close dialogue with the supervisory authority.”
Other financial institutions were also in the mix, evaluating the possibility of buying SVB UK, including OakNorth Bank, The Bank of London and Abu Dhabi investment firm Royal Group.
CEO of HSBC UK
“It wasn’t until … early Monday morning that we thought, ‘well, I think we have a bank,’ and we started preparing communications at that time,” Stuart said.
HSBC UK announced on Monday at 7 London time that they bought Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7bn of 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 any black holes?’ No, not that we could see,” said Stuart.
“Was it worth – your words, not mine – a bet. We thought it was a sensible approach, we didn’t ask for government aid, we didn’t ask for anything out of the ordinary,” he said, adding that the deal will help HSBC with accelerating its strategic plan by two or three years.
“It’s a wonderful opportunity,” he said.