HSBC CEO explains how the bank bought Silicon Valley Bank UK

HSBC came to the rescue of Silicon Valley Bank UK in a crucial deal for the entire banking industry. But if you had told its CEO – just days in advance – that it would happen, he wouldn’t have believed you.

“I was going about my normal business on Friday. If someone had told me [that] we’d be acquiring another bank in two or three days, I wouldn’t have believed it,” Ian Stuart, CEO of HSBC UK Bank, told CNBC “Squawk Box Europe” THURSDAY.

Everything was very fast. Silicon Valley Bank – a US lender with clients primarily in the world of tech and healthcare startups – was deemed insolvent by US regulators on Friday. This raised alarm bells across the pond, where SVB had a subsidiary.

Consequently, the bank of england announced on Friday that, “in the absence of any other significant information”, it would place Silicon Valley Bank UK in insolvency proceedings.

“I woke up Saturday morning, saw the ad and just after 10.30am we were in touch with the regulator offering our help, myself and our global CEO Noel Quinn both in touch. And that’s went a little quiet, I think at that point, we were just trying to offer whatever help we could,” Stuart said.

More than 200 companies – depositors with SVB UK – wrote to the UK 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 had access to the data bank early on Sunday. We had about five hours to do our due diligence and around 6 p.m. on Sunday – and we had many meetings throughout the day – as far as we were concerned. , it was a competitive situation, and I can honestly say that even until about 10:00 p.m., 11:00 p.m. I still thought it was a competitive situation and around that time we were in dialogue very close with the regulator.”

Other financial institutions were also on board and weighing the possibility of buying SVB UK, including OakNorth Bank, The Bank of London and Abu Dhabi investment company Royal Group.

It’s a wonderful opportunity.

“It wasn’t until…early Monday morning that we thought, ‘well, I think we have a bank,’ and we started preparing communications then,” Stuart said.

HSBC UK announced at 7 a.m. London time on Monday that he was buying Silicon Valley Bank UK for £1 ($1.21). The deal protected £6.7bn of deposits.

“We have a UK bank which is well run, very capable people, good quality products and yes, five hours is not a lot of time to do due diligence, but we decided: ‘Y does it have black holes? No, not that we can see,” Stuart said.

“Was it worth – 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 unusual,” he said. he said, adding that the deal will help HSBC accelerate its two- or three-year strategic plan.

“It’s a wonderful opportunity,” he said.

UK Treasury Secretary: Silicon Valley Bank collapse not a systemic problem

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top