HSBC CEO talks about how the bank bought Silicon Valley Bank in the UK

  • The Bank of England announced on Friday that “in the absence of any further meaningful information” it would place the UK’s Silicon Valley Bank into a bankruptcy proceeding.
  • More than 200 companies – depositors with SVB UK – on Saturday wrote to the UK Treasury asking for help.
  • HSBC UK announced at 7 am London time Monday that it will buy Silicon Valley UK bank for £1 ($1.21). The deal protects £6.7 billion in deposits.

HSBC came to the rescue of Silicon Valley UK bank in a deal decisive for the entire banking sector. But if you told its CEO – just a few days ago – that this would happen, he wouldn’t believe you.

“I was going about my usual business on Friday. If someone tells me [that] “We’re going to take over another bank in two or three days, I wouldn’t have believed it,” Ian Stewart, chief executive of HSBC UK, told CNBC’s “Squawk Box Europe” on Thursday.

It was all very fast. US regulators on Friday deemed Silicon Valley Bank — a US lender operating mostly in the emerging world of technology and healthcare — insolvent. That raised alarm bells across the pond, as SVB had an affiliate.

As a result, the Bank of England announced on Friday that “in the absence of any further meaningful information” it would place the UK’s Silicon Valley Bank into a bankruptcy proceeding.

“I got up on a Saturday morning, we saw the ad, and a little after 10:30 a.m. we were in contact with the regulator to offer our assistance, and me and global CEO Noel Quinn were in touch. And it quieted down a little bit, I think at that point we were just trying to offer any Possible help.

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More than 200 companies – depositors with SVB UK – on Saturday wrote to the UK Treasury asking for help. They said some would not be able to comply with payroll deadlines without accessing their deposits with SVB UK.

“We managed to get to the data bank early on Sunday. We had about five hours to do our due diligence and by about 6pm on Sunday — and we had a lot of meetings throughout the day — as far as we were concerned, it was competitive, and I could To say honestly that up until about 10, 11pm at night I still thought it was a competitive situation and around that time, we were in really close dialogue with the regulator.”

Other financial institutions have also been involved in the mix and are evaluating the possibility of buying SVB UK, including Oak North Bank, Bank of London and Abu Dhabi investment firm Royal Group.

It’s an amazing opportunity.

Ian Stewart

CEO of HSBC UK

“It wasn’t until the early hours of Monday morning that we thought, ‘Okay, I think we’ve got a bank,'” Stewart said, “and we started to set up communications at that point.”

HSBC UK announced at 7 am London time Monday that it will buy Silicon Valley UK bank for £1 ($1.21). The deal protects £6.7 billion in deposits.

“We have a well-run UK bank, very good people, quality products, and yes, five hours isn’t a long time to do due diligence, but what we decided was, ‘Are there any black holes?’” Stewart said.

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“Was it worth – your words, not mine – the gamble. We thought it was a reasonable approach, we didn’t ask for government support, we didn’t ask for anything out of the ordinary,” he said, adding that the deal would help HSBC accelerate its two- or three-year strategic plan.

“It’s an amazing opportunity,” he said.

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