SVB, acquired by HSBC in a flash sale for just £1 in March as it was falling apart, SVB UK rebrands and expands under new ownership. The banking giant launches HSBC Innovation Bank a new unit that focuses on banking services for the emerging, investing and broader tech community.
Officially announced at the start of London Tech Week, the new division — technically a subsidiary of HSBC UK — will be bigger than just SVB UK assets: HSBC has added teams in the US, Israel and Hong Kong to the operation, with more than 700 people employed in the operation. For now, it seems that the clientele is mainly from United Kingdom: about 3.000 customers throughout the country outside its home country, HSBC said.
The firm sets up a lot of competition between former bedfellows: First Citizens acquired the majority of SVB's banking operations, which were in the US and included some $72 billion in deposits and loans and had been operating under the name of SVB Bridge Bank after the collapse of the holding company SVB Financial. .
Both go to market in true competitive style: First Citizens is currently suing HSBC for poaching SVB personnel, specifically people like David Sabow. who had been the head of SVB in the US Sabow will now run HSBC Innovation Banking outside the US. In fact, that lawsuit was probably filed before the announcement and push that became official today.
Erin Platts, who had been a director at SVB UK, appears to be leading the new Innovation Banking business under the title of 'CEO of HSBC Innovation Banking UK'.
The big established bank's effort to leverage the strategy of the fast-growing tech sector is reaching a tipping point, or at least HSBC hopes that will be the case. Funding for tech companies had been gushing like a geyser for years before and during the Covid-19 pandemic, one reason SVB, originally a community bank for the fledgling start-up industry, became an operation gargantuan that regulators were fighting to keep alive, but in the last 18 months, all of that has been reduced to a trickle, a huge contribution to the fracaso from SVB.
Now HSBC is betting that launching this new, redoubled effort, when the market is calmer and at a low point, will set it up for big gains as it returns, with the added cushion that it will have a huge giant behind it. to handle shots more skillfully than SVB.
It's unclear how big the business is early on with assets under management. When HSBC acquired SVB UK, the deal included taking on loans of around £5,500bn and deposits of around £6,700bn. In its latest reported figures, which cover the financial year ending December 31, 2022, SVB UK had posted a pre-tax profit of £88 million, and HSBC said at the time of the acquisition that tangible capital was expected to from SVB UK out of around £1,400 billion. .
"The UK's world-leading technology and life sciences sectors are critical to growing the UK economy and boosting global exports," said Noel Quinn, group chief executive of HSBC, in a statement. “HSBC now has a world-class team focused on innovation companies, their founders and their investors. We will protect this specialization and take it to the next level by combining these capabilities with our financial strength and global reach. Our new innovation teams will be there to support our clients' international growth at every step.”
The deal will cover technology as well as adjacent areas such as start-ups and finance in areas such as life sciences.
"The United Kingdom It is home to the world's leading life sciences and technology sectors, and I am proud of the role the British government has played in securing their future and enabling them to prosper," UK Prime Minister Rishi Sunak said in a statement. “HSBC Innovation Banking will help innovative companies unlock their potential, create more jobs and access new global opportunities, supporting my priority to grow the UK economy and cement our position as a science and technology superpower” .
