Key Points:
- Two giants, HSBC and JP Morgan, are considering buying the UK’s troubled Silicon Valley Bank (SVB).
- The agreement remains uncertain, and the Bank of England’s decision to bring SVB UK into bankruptcy proceedings could still happen in the next few hours.
- HSBC is more likely among global lenders to pursue a transaction.
- The collapse of SVB’s US-listed parent company, which the government already controlled.
The shock collapse of the Silicon Valley Bank (SVB) has attracted the attention of payment companies participating in the bid to acquire, including two giants, HSBC and JP Morgan.
Sky News learned that HSBC was considering an offer for the struggling technology-focused lender’s British division on Sunday night, joining many smaller competitors in the emergency sale process set off by the fall into the government hands of its US parent.
The US financial goliath JP Morgan has also been requested to review a bid.
According to an insider, a settlement was still in doubt, and the Bank of England might yet decide to file insolvency papers against SVB UK within the next few hours.
Of the two major lenders, HSBC is viewed as being more likely to seek a purchase.
If successful, HSBC will increase its exposure to corporate clients in its home UK market in the technology and biotechnology sectors.
Besides HSBC and JP Morgan among the international central banks, Barclays and Lloyds Banking Corporation and Oaknorth Bank, a business lending firm founded by prominent former Baoviet donor investors and the Bank of London, are required to consider participating in the sale before insolvency.
The government and banking regulators are racing to solve the crisis before the markets open on Monday morning. Rothschild, the investment bank, has asked SVB UK to handle the resolution process expedited processing with the consent of the Bank of England.
“The government recognizes that, given the importance of Silicon Valley Bank to its customers, its failure could impact the liquidity of the significant tech ecosystem. The government is treating this issue as a high priority, with discussions between the Governor of the Bank of England, the prime minister, and the chancellor taking place over the weekend.”
The collapse of SVB’s US-listed parent company, which the government already controls, was one of the biggest global bank failures since the 2008 financial crisis. As updated in an earlier Coincu News article, affected by this collapse, the crypto-friendly Signature Bank was also ordered by the FDIC to close yesterday to prevent the crisis from spreading.
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