HSBC Holdings Plc bought the UK unit of Silicon Valley Bank over the course of one frantic March weekend. The finer details of exactly what the British lender got for £1 ($1.25) are starting to emerge.
(Bloomberg) — HSBC Holdings Plc bought the UK unit of Silicon Valley Bank over the course of one frantic March weekend. The finer details of exactly what the British lender got for £1 ($1.25) are starting to emerge.
An analysis of UK corporate records provides a snapshot of SVB UK’s customers, with Wise Plc, the international payments provider, Made.com, the online home accessories retailer whose brand name was bought last year by Next Plc after it fell into administration, and 10x, the financial technology business founded by former Barclays Plc Chief Executive Officer Antony Jenkins among the best-known names. Pizza oven maker Ooni Ltd. is another customer.
In total, Bloomberg identified about 1,300 UK-registered companies that have or have had charges linked to SVB, and compiled key financial data for around 400 of those businesses that either filed electronically-searchable accounts or had the most SVB charges. Overall, these firms employed 19,000 people and had more than £4.8 billion in revenues and £2.5 billion in total short-term loans and borrowings to lenders, according to their latest available filings at Companies House.
Other prominent customers include the UK arms of American technology businesses that are likely to have banked with its former US parent. For instance, Cambium Networks Ltd. is the British subsidiary of Illinois-based Cambium Networks Corp., while Nintex UK Ltd. is the UK branch of the Bellevue, Washington-based business automation platform.
The records — while they don’t provide a complete picture of the customer base and loan book acquired — offer the most detailed look yet at the business of Silicon Valley Bank’s British unit, whose own filings prior to its takeover disclosed relatively little about its operations. HSBC noted in its filing announcing the deal that SVB UK recorded a profit before tax of £88 million in 2022 and had loans of around £5.5 billion and deposits of around £6.7 billion as of March 10.
Few other details about the unit have been forthcoming even as HSBC repeatedly hails the deal. Speaking at a shareholder meeting in Hong Kong this week, Chairman Mark Tucker told investors angry about the rushed nature of the deal that it had been “too good an opportunity” to turn down.
The tech sector “has been a strategic priority for HSBC UK for many years and the expertise of SVB UK is highly valued within the sector and by its customers,” Stuart Tait, head of commercial banking for HSBC UK, said in a statement. SVB UK “will continue to operate as a separate entity and with the same approach to customers it has always had but now with opportunities for them to benefit from HSBC’s global footprint.”
SVB UK has enjoyed rapid growth in recent years, according to the number of charges filed with the UK’s Companies House corporate register in recent years. After entering the UK market in 2004, it took several years for the business to gain traction. The analysis shows the number of charges registered by SVB in the UK broke through 200 around 2016, but in recent years business had more than doubled to more than 400 charges a year.
HSBC will certainly be taking on plenty of tech firms, with businesses registered as having a computer software focus making up by far the biggest share of the customer sample examined by Bloomberg, constituting about a third of the total. The next largest segment is financial services, followed by scientific research and development firms.
SVB UK is also London-centric, with more than half of the SVB UK customers identified by Bloomberg based in the British capital, the heart of the country’s tech scene. Cambridge is home to the next largest contingent of SVB clients, followed by Edinburgh.
Few customers appear to be based in Birmingham, the UK’s second largest city and the home to the headquarters of HSBC UK, the bank’s retail and commercial banking subsidiary that’s the new owner of SVB UK.
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