HSBC, the major British bank, introduced its new HSBC Innovation Banking unit on Monday, aiming to expand its presence in the technology sector. This move follows its last-minute rescue of the UK subsidiary of Silicon Valley Bank (SVB) in March.
After SVB’s parent company faced a crisis with customers fearing its solvency, HSBC acquired the London-based SVB unit for a mere £1. Earlier this year, SVB was one of several US and European banks that collapsed amidst the broader turmoil shaking the global banking industry.
The UK government and the Bank of England facilitated the acquisition in an effort to safeguard deposits, as Britain grapples with maintaining its status as an international tech hub.
Some skeptics have questioned whether HSBC, a traditional financial institution, is equipped to take on SVB’s legacy and finance tech-focused startups and small businesses.
Last week, HSBC UK CEO Ian Stuart dismissed these concerns, stating in an interview with CNBC’s Arjun Kharpal that the bank would provide funding at every stage, “from seed funding all the way through to IPO,” ensuring customers wouldn’t need to seek financing outside of their network.
On Monday, HSBC announced the launch of its Innovation Banking unit during London Tech Week, which will combine SVB UK with newly established teams in the US, Israel, and Hong Kong, with a specific focus on technology and life science ventures.
“The UK’s world-leading technology and life sciences sectors are crucial for the growth of the UK economy and the expansion of global exports,” stated HSBC Group Chief Executive Noel Quinn in a press release on Monday.
“HSBC now boasts an exceptional team dedicated to innovation companies, their founders, and investors. We will safeguard this expertise and take it to the next level.”
British Prime Minister Rishi Sunak applauded the new HSBC division, emphasizing its role in supporting innovative businesses and generating more employment opportunities, aligning with his goal to foster economic growth in the UK and solidify its position as a science and technology powerhouse.