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Evening Standard
Evening Standard
Business
Simon Hunt

HSBC reveals plans to rename Silicon Valley Bank UK as profits soar

HSBC boss Noel Quinn laid out a fresh vision for the development of SVB UK after it bought the beleaguered bank for £1 in March.

Quinn said he planned to unveil a new name for the entity following the demise of its US parent, and give it the opportunity to grow into a global business. There would be no staff cuts at the bank, its Finsbury Square offices would remain open and employees would not be asked to move to HSBC’s headquarters in Canary Wharf.

In a media call he told the Standard: “It’s a unit we purchased and we want to keep it with a separate identity and separate purpose.

“They’re known for their expertise in supporting the technology and life sciences sectors...we want to give them the opportunity of building that on a global basis.”

However, Quinn offered no recompense to the scores of senior SVB UK staff who lost significant sums of money as a result of their remuneration being tied up with shares in the firm’s collapsed parent.

He said: “We will try and make sure they’ve got good earning potential going forward. We’re supportive of them going forward.”

It comes as the London-based bank reported a surge in pre-tax profits by more than four billion dollars (£3.2 billion) in the first three months of 2023, while revenue soared by 64% to 20.2 billion dollars (£16.2 billion) compared to the same period 12 months ago, with the firm crediting the rise to higher net interest income due to rate rises across the globe.

HSBC said it had been given a $1.5 billion boost from its SVB UK takeover, despite posting a $232 million write-down in the value of the firm’s assets, which CFO Georges Elhedery said related to an adjustment in the value of loans and government bonds.

“In the weeks that have passed since the time of doing the deal there have been no nasty surprises. Quinn said. “The UK business was well run and had a good portfolio of customers.”

HSBC shares rose 4.6% to 600p.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “The acquisition of Silicon Valley Bank’s UK arm for £1 looks like a steal.

“It’s hard to knock a provisional gain of $1.5bn and increased exposure to the high-growth tech and life sciences sectors. This was a strong quarter, even once you strip out the one-off gains mixed into reported numbers.”

It follows the failure of US bank First Republic over the weekend, with US regulators putting the firm into receivership and selling its assets to JPMorgan after it saw more than $100 billion in outflows in the first quarter.

Quinn said the bank’s collapse – the second biggest in US history – was not indicative of wider systemic issues facing global banking, and cautioned against a move to expand deposit protection.

“Deposit protection across all assets undermines the position of trust based banking,” he said.

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