The Bank of London has announced that it has made formal enquiries for the sale of Silicon Valley Bank’s UK subsidiary.
A coalition of prominent private equity firms, led by The Bank of London, reveals it has filed official proposals to His Majesty’s Treasury, The Prudential Regulation Authority at The Bank of England, and the Board of Silicon Valley Bank UK regarding the sale.
“Silicon Valley Bank cannot be allowed to fail given the vital community it serves. This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB’s UK client base. It would be deeply disappointing for this moment to lead to further consolidation of power among big banks,’’ says Anthony Watson, group chief executive and Founder of The Bank of London.
HSBC is authorised and regulated by the PRA (the Prudential Regulation Authority) and the FCA (Financial Code Authority).
This course of action has been adopted to stabilise SVBUK, assuring the continuity of banking services, minimising interruption to the UK technology sector, and promoting confidence in the financial system. With a vibrant start-up and scale-up ecosystem, the UK boasts one of the world’s leading tech sectors.
Based in London, HSBC is Europe’s largest bank and one of the world’s major banking and financial services firms, with 39 million customers worldwide. Clients of SVB UK can access their deposits and banking services as usual as of today.
Using powers granted by the Banking Act 2009, the Bank of England, in agreement with the Government, enabled this transaction. There is no taxpayer money involved, and client deposits are secure.
The Bank of London is the United Kingdom’s sixth primary clearing bank, and only the second in 250 years.
It is unique among UK banks in that it does not lend, invest, or leverage its balance sheet; instead, it keeps 100% of its deposits with the Bank of England, ensuring that clients always have full access to their deposits in real-time.
UK Chancellor of the Exchequer Jeremy Hunt adds: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
“Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.
“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”