![The CEO of HSBC UK Bank explains how the UK branch of Silicon Valley Bank was bought for £1](https://image.cnbcfm.com/api/v1/image/107209696-16789496811678949679-28602173204-1080pnbcnews.jpg?v=1678952634&w=750&h=422&vtcrop=y)
HSBC got here to the aid of Silicon Valley Bank UK in an important transaction for the entire banking sector. But when you had told its CEO – just days before – that this is able to occur, he would not have believed you.
“On Friday I went about my normal business. If someone had told me [that] we might buy one other bank in two or three days, I would not imagine it,” Ian Stuart, CEO of HSBC UK Bank, told CNBC’s “Squawk Box Europe”.
Every little thing happened in a short time. Silicon Valley Bank – a US lender with clients primarily in the world of tech start-ups and healthcare – was declared insolvent by US regulators on Friday. This caused alarm throughout the pond where SVB had a subsidiary.
As such, the Bank of England announced on Friday that “in the absence of further substantive information” it will take Silicon Valley Bank UK into insolvency proceedings.
“I woke up Saturday morning, saw the announcement, and just after 10:30am we were in contact with the regulator offering our help, me and our global CEO Noel Quinn. And I feel it went just a little quiet at that time, we were just attempting to offer all the help we could,” Stuart said.
Greater than 200 SVB UK depositors wrote to the Treasury on Saturday asking for help. They said some wouldn’t have the opportunity to satisfy payroll deadlines without access to their deposits at SVB UK.
“We accessed the data bank early on Sunday. We had about five hours to do the due diligence, and around 6pm on Sunday – and we had a number of meetings throughout the day – it was a competitive situation so far as we were concerned, and I can truthfully say even until around 10pm, 11pm: 00 I still felt it was a competitive situation and around that point we were in very close dialogue with the regulator.”
Other financial institutions were also in the mix and were evaluating the possibility of shopping for SVB UK, including OakNorth Bank, The Bank of London and Abu Dhabi-based investment firm Royal Group.
It’s an amazing opportunity.
“It wasn’t until the early hours of Monday that we thought, ‘yeah, I feel we now have a bank,’ and we began making announcements at that time,” Stuart said.
HSBC UK announced at 7am London time on Monday that it was buying Silicon Valley Bank UK for £1 ($1.21). The deal protected deposits of £6.7 billion.
“We have now a bank in the UK that’s well run, superb people, good quality products and yes five hours just isn’t much time to do due diligence but we decided, ‘Are there any black holes?’ No, not that we will see, ”said Stuart.
“Was it value it – in your words, not mine – to risk it. We felt it was an affordable approach, we didn’t ask for presidency support, we didn’t ask for anything out of the bizarre,” he said, adding that the Agreement would help HSBC speed up its strategic plan by two or three years.
“It’s an amazing opportunity,” he said.
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