HSBC Rescued Britain’s Silicon Valley Bank in a deal critical to the entire banking industry. But if you had told its CEO a few days ago that this was going to happen, he wouldn’t have believed you.
“I was doing my day job on Friday. If someone said to me [that] We’re going to buy another bank in two or three days, I can’t believe it,” HSBC UK Bank CEO Ian Stewart told CNBC’s “Squawk Box Europe” Thursday.
Everything is fast. On Friday, U.S. regulators found Silicon Valley Bank — a U.S. bank whose clients are largely in technology and health care startups — insolvent. That set off alarm bells across the pond, where SVB has subsidiaries.
therefore, bank of england announced on Friday that it would place Britain’s Silicon Valley Bank in insolvency proceedings “in the absence of any meaningful further information”.
“Woke up on Saturday morning to see the announcement and by just after 10.30am we were in touch with the regulators who were helping and I was in touch with our global chief executive Noel Quinn .I think things calmed down a bit, and I think at that point we just wanted to help in any way we could,” Stewart said.
More than 200 companies – depositors of SVB UK – wrote to the Treasury on Saturday asking for help. Some people will not be able to meet payroll deadlines without withdrawing their SVB UK deposits, they said.
“We hit the database early on Sunday. We had about five hours to do our due diligence, and by about 6pm on Sunday — we had a lot of meetings throughout the day — as far as we were concerned, it was It’s a competitive situation, and I honestly think it’s a competitive situation even at around 10, 11 at night, and around that time we’re in very close conversations with regulators.”
Other financial institutions are also evaluating the possibility of acquiring SVB UK, including OakNorth Bank, Bank of London and Abu Dhabi investment firm Royal Group.
This is a great opportunity.
“It wasn’t until … early Monday morning that we thought, ‘Well, I think we have a bank,’ and that’s when we started preparing the newsletter,” Stewart said.
HSBC announced at 7am London time on Monday It bought Britain’s Silicon Valley Bank for £1 ($1.21). The transaction protected deposits of £6.7bn.
“We have a well-run UK bank with very good staff, great product, and yes, five hours to do due diligence is not a lot, but our decision was, ‘Is there a black hole? No, Not something we can see,'” Stewart said.
“It’s worth — your word, not mine — a gamble. We think it’s a smart move, we’re not asking for government support, we’re not asking for anything out of the ordinary,” he said, adding that the deal It will help HSBC advance its strategic plan by two or three years.
“This is a fantastic opportunity,” he said.