HSBC averted a crisis in the UK tech sector on Monday by bailing out the UK unit of Silicon Valley Bank in a dramatic fire sale after an all-night meeting with British ministers led by Rishi Sunak and the Bank of England. .
HSBC overnight SVB In the UK, he attended a desperate meeting between bank chief executive Noel Quinn and Snak, who is now in the US.
Selling the battered bank was a favorite choice of British Prime Minister Jeremy Hunt because it would avoid having to make major government interventions to protect depositors.
Hunt wrote on Twitter at 7 a.m.: Deposits are protected and there is no taxpayer support.
“I said yesterday that we will protect our technical department, and we have worked diligently to deliver on that promise.”
The extraordinary overnight rescue mission involved Snack, Hunt and City Minister Andrew Griffiths, as well as Bank of England Governor Andrew Bailey and Prudential Regulation Authority Sam Woods.
A person briefed on negotiations over the future of SVB UK said it was a “purely competitive” process with several parties interested in buying the stricken bank.
Snak, who is in California for a defense summit with US and Australian leaders, was said to have been “very hands-on” overnight.
Hunt said on Sunday there was a “serious risk” to technology and life sciences firms using SVB’s UK banks, with the senior founder unable to pay wages or bills in the coming week. He warned that it would be a “slaughter”.
The government has raced the weekend to try to sell SVB UK and has put together a back-up plan to help businesses that are behind on deposits with lenders. On Sunday night, U.S. regulators said SVB’s U.S. depositors All money accessible on monday.
Middle Eastern buyers were among the main bidders in a move reminiscent of the 2008 financial crisis bailout, said people familiar with the British government’s attempt to broker the sale.
British banks Oaknorth and the Bank of London also participated in the bid, with the Bank of London leading a consortium that includes a private equity group, according to people familiar with the matter.
Hours after regulators shut down California-based SVB on Friday in the biggest US bank failure since 2008, the BoE said it would have to force another UK banking arm of the group into bankruptcy. and triggered the weekend selling process.
SVB UK has 3,300 UK customers, many of whom have deposits of less than £85,000 covered by the financial insurance scheme, according to people familiar with the company.
The UK government said in December that the country was home to “more than 85,000 startups and scale-ups”.
Asked if he would guarantee 100% of deposits, Hunt told the BBC’s Laura Kuenssberg:
Sunak echoed the BoE’s assertion that SVB’s bankruptcy did not present a “systemic contagion risk”.
Additional reporting by Stephen Morris, Ivan Levingston, Michael O’Dwyer, Emma Dunkley, and Anjli Raval
https://www.ft.com/content/216b193d-62b3-4e5e-8f67-e8eb3d96ebf1 HSBC buys UK unit of Silicon Valley Bank in bailout deal