The Bank of London Offers to Buy Silicon Valley Bank’s UK Operations

The Bank of London has offered to purchase the British operations of the collapsed Silicon Valley Bank.

The clearing bank said Sunday (March 12) it has sent proposals to U.K. authorities, including the Treasury and the Bank of England (BoE), Reuters reported. The bank is heading a group of investors which include private equity funds.

“Silicon Valley Bank cannot be allowed to fail given the vital community it serves,” The Bank of London Co-Founder and CEO Anthony Watson said in a statement. “This is a unique opportunity to ensure the U.K. has a more diversified banking sector, whilst allowing continuity of service to SVB’s U.K. client base.”

Based in California, Silicon Valley Bank (SVB) was taken over by the regulators last week after a run on deposits. The Federal Deposit Insurance Corporation (FDIC) has since begun to work on ways to pay back its depositors, including auctioning off the bank’s assets Sunday.

As of Sunday evening, no buyers had emerged, though federal regulators said they would take measures to ensure depositors could still access their funds.

PYMNTS noted Sunday that the collapse of SVB had impacts beyond U.S. borders, with startups in a host of countries asking officials for help. In Great Britain, a group of several dozen tech founders wrote to U.K. Chancellor Jeremy Hunt to intervene.

“The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years,” they said. “Many businesses will be sent into involuntary liquidation overnight.”

The BoE placed Silicon Valley Bank UK Limited — SVB obtained a U.K. banking license in 2012 — into an insolvency procedure to lessen damage from the collapse and protect British firms from major losses.

The BoE noted that SVB UK, “has a limited presence in the U.K. and no critical functions supporting the financial system. In the interim, the firm will stop making payments or accepting deposits.”

Talks were held over the weekend between Hunt, Prime Minister Rishi Sunak and BoE Governor Andrew Bailey to explore the consequences of the shutdown in response to the letter, CNBC reported.

“We will bring forward immediate plans to ensure the short-term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met,” Hunt said, per CNBC, adding that the government was treating the issue as a “high priority.”