Global Courant
The CEO of HSBC UK tells CNBC how the bank bought Silicon Valley Bank’s UK unit.
Nurphoto | Nurphoto | Getty Images
British banking titan HSBC unveiled a new HSBC Innovation Banking unit on Monday as it tries to penetrate the tech sector following the rescue of the failed Silicon Valley Bank’s (SVB) UK subsidiary in March.
HSBC acquired the London-based SVB unit for £1 after its parent company suffered a run on its assets fueled by customer fears over the bank’s solvency. SVB was one of several US and European lenders that went under earlier this year as broader turmoil rocked the global banking sector.
The UK government and the Bank of England facilitated the purchase in an effort to protect deposits as Britain individually struggles to maintain its position as an international technology capital.
Some have questioned whether traditional financial institution HSBC is well placed to take on SVB’s legacy and fund technology-focused startups and small businesses.
The criticism was shot down last week by HSBC UK CEO Ian Stuart, who told CNBC’s Arjun Kharpal that the bank would take over its operations “from seed funding through IPO, customers will never have to go outside that network to meet their funding requirements.”
HSBC said Monday its Innovation Banking unit, launched during London Tech Week, will bring together SVB UK and newly formed teams in the US, Israel and Hong Kong as it focuses on technology and life science companies.
“The UK’s leading technology and life sciences sectors are central to growing the UK economy and boosting global exports,” HSBC Group Chief Executive Noel Quinn said in a Monday statement.
“HSBC now has a world-class team focused on innovation companies, their founders and their investors. We will protect this specialty and take it to the next level.”
British Prime Minister Rishi Sunak said the new HSBC division will help innovative companies and create additional jobs, “supporting my priority to grow the UK economy and strengthen our position as a scientific and engineering powerhouse.”
