Silicon Valley Bank UK is sold to HSBC as Jeremy Hunt confirms ‘deposits are protected with no taxpayer support’
SILICON Valley Bank UK has been sold to HSBC in a last ditch effort to save thousands of jobs and businesses in the tech sector.
The “white knight” private sale was approved by the government and Bank of England early this morning.
It comes as a huge relief to thousands of tech start-ups that feared not being able to pay staff or suppliers today.
The Treasury confirmed no taxpayer funds were involved in the transaction and all customer deposits have been protected.
Normal banking services can also be accessed again.
Chancellor Jeremy Hunt said: “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.”
The Chancellor added: “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.”
Yesterday businesses warned of a warned of a “start up extinction event” following the collapse of Silicon Valley Bank.
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Around 3,000 companies held £7bn in deposits with the failed institution’s UK branch.
Speaking on board his jet to San Diego yesterday, Rishi Sunak insisted there was limited “contagion risk” for the wider UK economy, but the Treasury had spent the weekend looking at how to protect depositors cash-flows and avoid a meltdown.
Buyer HSBC is the largest bank in Europe, with 39 million customers globally.
The Bank of England confirmed no other UK financial institutions are affected by either the major sale or the failure of SVBUK’s US parent bank.
Meanwhile, the wider UK banking system remains “safe, sound, and well capitalised”.