HSBC buys UK arm of Silicon Valley Bank after collapse – latest updates

The UK arm of collapsed US lender Silicon Valley Bank has been bought by HSBC after the government and Bank of England stepped in to "facilitate" a private sale.

Chancellor Jeremy Hunt confirmed that all customer deposits have been protected under the deal, with no taxpayer cash involved.

Around 200 UK tech companies had been put “at serious risk” from the bank’s collapse.

Mr Hunt said: "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."

Key Points

• US regulator says it will protect all SVB deposits

• All deposits in SVB safe - Hunt

• HSBC to buy SVB in rescue deal

• Government announcement expected imminently

• 250 UK tech firms at risk

• Silicon Valley Bank UK collapses

Second bank closed as regulators say they will protect Silicon Valley Bank deposits at no cost to taxpayer

11:05 , Matt Mathers

All clients of Silicon Valley Bank will have access to their funds from Monday at no cost to US taxpayers, federal regulators announced as a second bank was shuttered.

Secretary of the Treasury Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chairman Martin Gruenberg released a joint statement on Sunday evening outlining what they say are decisive actions to protect the US economy and strengthen public confidence in the banking system.

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors,” the statement reads.

Oliver O’Connell reports:

Second bank closed as regulators move to protect Silicon Valley Bank deposits

Watch: UK banking system is ‘resilient'

10:50 , Matt Mathers

Jeremy Hunt told broadcasters that the UK’s banking system is "resilient" amid concerns sparked by the collapse of Silicon Valley Bank.

The chancellor told broadcasters, following the sale of the banking arm to HSBC: "We always have to watch everything that’s happening everywhere in the world when it comes to financial stability.

"But what I would say is the Bank of England is very clear - the UK banking system is extremely secure, it’s well capitalised.

"And I think we demonstrated that resilience by what was happening over the weekend and the fact that we were able to come up with a solution so quickly."

Biden will address the nation about the collapse of Silicon Valley Bank

10:30 , Matt Mathers

President Joe Biden is set to address the nation about the sudden collapse of Silicon Valley Bank, which marked the biggest US bank failure since the 2008 global financial crisis and the second-biggest in American history.

In a statement on Sunday evening, the president said that he “will deliver remarks on how we will maintain a resilient banking system to protect our historic economic recovery” in a speech to the American people on Monday morning.

Rachel Sharp reports:

Biden will address the nation about the collapse of Silicon Valley Bank

‘Anxious weekend'

10:16 , Matt Mathers

A tech boss has told of the “anxious weekend” he had before HSBC stepped in to save collapsed lender SVB earlier this morning.

Toby Mather, founder and chief executive of Lingum, an education start-up,  said his company would have struggled to pay staff wages in a few weeks’ time.

"We had enough money in bank accounts outside the UK and enough revenue coming through each week from our customers that we could look our staff in the eyes at nine o’clock this morning and say we can make payroll in two weeks, but it would have been very uncertain from then", he told the BBC.

THG has no exposure to SVB

10:00 , Matt Mathers

Formerly called The Hut Group, online retailer THG said it "does not have any exposure to SVB", with no cash in one of its accounts or loans from the bank.

THG plc, formerly The Hut Group, is a British e-commerce retail company headquartered at Manchester Airport, England.

It sells own-brand and third-party cosmetics, dietary supplements, luxury goods.

FTSE 100 suffers sharp fall as HSBC buys Silicon Valley Bank UK for £1

09:55 , Matt Mathers

London’s FTSE 100 Index has tumbled further as banks remained in the red amid fallout from the collapse of Silicon Valley Bank despite emergency action in the US to protect customers and a rescue deal in the UK.

The top tier fell nearly 2 per cent in morning trading on Monday, down 132.2 points at 7616.2, with banks and financial stocks extending share losses seen on Friday.

HSBC’s £1 deal to take over the UK arm of failed Silicon Valley Bank (SVB UK) did not halt the slide on the London market as fears over contagion mounted.

Holly Williams reports:

FTSE 100 suffers sharp fall as HSBC buys Silicon Valley Bank UK for £1

‘No loss expected'

09:45 , Matt Mathers

Naked Wines said there is "no loss expected" from the failure. It has £14 million in a "cash sweep account" where SVB was the custodian.

This money should be recoverable through the process set up by US authorities.

Before the US Treasury said it would protect depositors, Naked Wines thought there was about £600,000 that may be at risk and was uninsured.

What are British companies are saying about exposure to SVB?

09:30 , Matt Mathers

Dozens of companies listed on the London Stock Exchange updated shareholders on their exposure to the collapse of Silicon Valley Bank and its UK branch.

HSBC said on Monday morning it is taking over the UK part of the collapsed bank, while authorities in the US have said depositors in SVB will have access to all their money from today.

More than 40 London-listed companies posted updates as markets opened on Monday, with Moonpig, THG, Future and Naked Wines among the most prominent.

Moonpig

Greetings card company Moonpig said it has "no material exposure to SVB UK". It does not have an account with the bank and holds no cash there.

It has the option to borrow around £250 million from 10 banks, of which SVB is one. It had a promise of £13 million of loans from SVB it has not yet drawn.

SVB collapse ‘very different’ to Lehman Brothers

09:10 , Matt Mathers

Martha Lane Fox, president of the British Chambers of Commerce, said the failure of Silicon Valley Bank is "very different" from the collapse of Lehman Brothers in 2008.

Asked on BBC Radio 4’s Today programme about the wider questions following the collapse, she said: "It was a banker that provided extra careful services for the sector that is growing very rapidly and is demanding attention from all of us because it’s going to be a vital part of how we position ourselves in the future and our economy’s strength in the future.

"You could argue it was a single point of failure, or you could argue that it was enabling this patchwork of incredible businesses to grow quickly.

"This is not a collapse because of risky management. In many ways it’s not similar to the banking collapse in 2008 or Lehman’s collapse or anything like that."

She described it as a "very different structural problem".

We didn’t want to use taxpayers’ money to save SVB - Hunt

08:45 , Matt Mathers

The chancellor said the UK government had been "neutral" on a solution to the collapse of Silicon Valley Bank, but that ministers did not want taxpayers’ money to be used.

Jeremy Hunt told broadcasters: "We were keen to make sure there was a solution that protected our tech sector, protected these companies.

"We were neutral as to what that solution was, except for the fact obviously we did not want taxpayers’ money to be used - but we were looking at all options.

"And we needed to be sure that if the sale didn’t happen, we had other solutions ready.

"That’s why it was important to do a huge amount of work on a variety of solutions over the weekend."

SVB UK had around £6.7 billion of deposits as of Friday last week

08:30 , Matt Mathers

HSBC and the Treasury said customers of SVB UK will be able to access their deposits and banking services as normal following the sale to HSBC for a nominal sum of £1.

There had been mounting worries that the collapse of SVB - the second-largest bank failure in history - could also have sent shockwaves through the technology and life sciences sector in the UK, with many of those firms customers of the bank’s British business.

SVB UK had around £6.7 billion of deposits and loans of about £5.5 billion as at Friday last week, while its balance sheet stood at £8.8 billion, according to the Bank of England.

But the Bank said the "scale of the deterioration of liquidity and confidence means that, in the view of the Bank and the PRA, the position was not recoverable".

"Therefore, the Bank of England decided, in consultation with HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), to use the resolution powers for stabilising failing banks that were brought in following the financial crisis," it added.

UK start-up sector could have been ‘decimated’ with HSBC rescue deal

08:10 , Matt Mathers

The UK’s start-up sector could have been “decimated” without HSBC decision to rescue the UK division of Silicon Valley Bank, an expert has said.

Russ Shaw, of London Tech Advocates, said there was a “collective sight of relief” this morning after the move was announced.

More comments from Mr Shaw below:

All SVB services will continue as normal - BoE

07:22 , Matt Mathers

In a statement, the BofE said: "The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC).

“HSBC is authorised and supervised by the PRA and the FCA.

"This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.

"The Bank and HMT can confirm that all depositors’ money with SVBUK is safe and secure as a result of this transaction. SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.

"Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal. SVBUK staff remain employed by SVBUK, and SVBUK continues to be a PRA/FCA authorised bank."

‘Deposits will be protected'

07:16 , Matt Mathers

Chancellor Jeremy Hunt has confirmed that failed lender Silicon Valley Bank has been sold to HSBC.

In a tweet, he said: "This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.

"Deposits will be protected, with no taxpayer support.

"I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise."

Breaking: HSBC to buy SVB

07:05 , Matt Mathers

The government and the Bank of England have "facilitated a private sale" of Silicon Valley Bank UK to HSBC, with "no taxpayer support", chancellor JeremyHunt said.

We’ll have more on this breaking story as it comes in.

Full story: More than 200 UK firms at ‘serious risk’ from Silicon Valley Bank collapse

07:02 , Matt Mathers

At least 200 UK tech companies are at “serious risk” from the collapse of the British division of Silicon Valley Bank.

Rishi Sunak and the chancellor have held emergency talks with the governor of the Bank of England Andrew Bailey this weekend to come up with a cash lifeline for affected firms as the bank goes into insolvency.

Meanwhile, a number of potential buyers circle the failed lender.

Banking giants HSBC and JP Morgan were among several parties exploring buying the bank’s British operations, Sky News reported. Both declined to comment.

Adam Forrest reports:

UK firms at ‘serious risk’ from Silicon Valley Bank collapse, warns Jeremy Hunt

07:00 , Matt Mathers

Good morning and welcome to The Independent’s live businesses coverage.

The government is set to make an announcement after the British division of Silicon Valley Bank collapsed, putting 250 UK tech firms at “serious risk”.

Stay tuned for all the latest updates.