HSBC builds innovation division from the bones of collapsed SVB UK

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HSBC UK CEO tells CNBC how the bank bought the UK unit of Silicon Valley Bank.

Nurfoto | Nurfoto | Getty Images

British banking giant HSBC unveiled a new unit of HSBC Innovation Banking on Monday, which seeks to enter the tech sector after the 11th-hour bailout of the UK branch of bankrupt Silicon Valley Bank (SVB) in March.

HSBC has acquired London-based unit SVB for 1 after its parent company suffered a run on its assets fueled by customer fears about the bank’s solvency. SVB was one of several US and European lenders that met their downfall earlier this year as broader turmoil rocked the global banking sector.

The UK government and the Bank of England have facilitated the purchase in an effort to protect deposits, as Britain separately struggles to maintain its position as an international technology capital.

Some have questioned whether traditional financial institution HSBC is ideally placed to take over SVB’s legacy and fund tech-focused startups and small businesses.

The criticism was dismissed last week by HSBC UK CEO Ian Stuart, who told CNBC’s Arjun Kharpal the bank would take its business “from seed funding all the way to the IPO, clients will never have to leave that network.” to meet their funding requirements.

HSBC said on Monday that its Innovation Banking unit, launched at 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 sciences businesses.

“The UK’s world-leading technology and life sciences sectors are vital to the growth of the UK economy and boosting global exports,” HSBC Group Chief Executive Noel Quinn said in a statement. on Monday.

“HSBC now has a world-class team focused on innovative companies, their founders and their investors. We will protect these specializations and take them to the next level.”

UK Prime Minister Rishi Sunak said the new HSBC division would help innovative businesses and create more jobs, “supporting my priority of growing the UK economy and consolidating our position as a science and technology superpower”.

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