The Bank of London, a clearing bank launched in 2020, has submitted a bid to buy the UK subsidiary of Silicon Valley Bank after it collapsed on Friday.
The Bank of London said on Sunday evening it is leading a “consortium of private equity firms” to take over SVB UK, which has more than 3,300 business customers.
“Silicon Valley Bank cannot be allowed to fail given the vital community it serves,” said Anthony Watson, group chief executive, The Bank of London. “This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB UK’s client base.”
The bank said it has submitted “formal proposals” to the Treasury, the Prudential Regulation Authority at the Bank of England and the board of Silicon Valley Bank UK.
It is the first bank to officially confirm it has submitted a rescue bid after days of reports that high street banks have been considering offers to save the startup lender.
On Friday, the Bank of England moved to put SVB UK into insolvency proceedings, causing panic among the country’s startup ecosystem, many of whom found themselves unable to access funds held by the bank.
Startup founders and CEOs have been scrambling to ensure they have enough capital to make payroll and cover short to medium-term costs.
A statement from @thebankoflondon regarding @SVB_UK (Silicon Valley Bank UK Limited) pic.twitter.com/OHXx7kmpRY
— The Bank of London (@thebankoflondon) March 12, 2023
High street banks Barclays and HSBC have emerged as potential bidders, according to various media reports. Challenger bank OakNorth and JP Morgan are also reportedly considering offers.
However, in an apparent swipe at the big banks, Watson said: “It would be deeply disappointing for this moment to lead to further consolidation of the power of legacy old UK banks.”
SVB UK faces liquidation on Monday unless a last-ditch buyer is found.
The Treasury said it is looking at ways to “minimise the damage” to the UK’s startup ecosystem and looking to find a solution as a “high priority”.
The shadow chancellor, Rachel Reeves, said: “The chancellor must act urgently to understand the exposure of UK firms to the bank, and take action to prevent large-scale damage being done to this crucial sector of the British economy.”