HSBC is making waves in the tech industry with the rebranding and expansion of its SVB UK acquisition. Today, HSBC announced the launch of HSBC Innovation Banking, a specialized unit dedicated to providing banking services tailored to startups, investors, and the wider tech community.
Rumors about this strategic move had been swirling for weeks, and the official announcement during the commencement of London Tech Week adds to the excitement. This new division, operating as a subsidiary of HSBC UK, goes beyond the assets of SVB UK, with teams now established in the United States, Israel, and Hong Kong. Over 700 professionals have been enlisted to drive this endeavor, initially catering to a predominantly UK-based clientele of approximately 3,000 customers.
Interestingly, this move sets the stage for intense competition between former allies. First Citizens, which acquired the majority of SVB's US-based operations, including a staggering $72 billion in deposits and loans, has filed a lawsuit against HSBC for allegedly poaching SVB staff. Notably, key figures like David Sabow, the former head of SVB in the US, now spearhead HSBC Innovation Banking's US operations. In a bold move, HSBC also recruited the entire SVB Israel team, led by David Cohen, along with Gadi Moshe, Alon Oz, Tamir Efrati, Meir Slobodov, and others.
Erin Platts, previously heading SVB UK, is now at the helm of the new Innovation Banking business, assuming the title of "CEO of HSBC Innovation Banking UK."
HSBC's foray into the rapidly growing technology sector comes at a critical juncture. While funding for tech companies surged before and during the Covid-19 pandemic, the landscape has recently experienced a slowdown. HSBC aims to leverage this opportune moment by launching HSBC Innovation Banking, banking on its solid foundation and extensive resources to navigate any challenges that lie ahead.
The initial size of the business, in terms of assets under management, remains unclear. When HSBC acquired SVB UK, the deal included assuming loans worth around £5.5 billion and deposits totaling approximately £6.7 billion. SVB UK recorded a profit before tax of £88 million in its last reported figures, and HSBC expects SVB UK's tangible equity to be around £1.4 billion.
Noel Quinn, Group Chief Executive of HSBC, emphasized the significance of the UK's technology and life sciences sectors in driving economic growth and global exports. He expressed his confidence in the world-class team at HSBC Innovation Banking, committed to supporting innovation companies, founders, and investors, while leveraging the bank's financial strength and global reach.
HSBC Innovation Banking will not only cover technology but also extend its services to adjacent areas, including startup businesses and financiers in fields like life sciences.
UK Prime Minister Rishi Sunak commended the launch of HSBC Innovation Banking, recognizing the crucial role played by the UK government in securing the future of the country's leading tech and life sciences sectors. Sunak expressed optimism that HSBC Innovation Banking would unlock the potential of innovative businesses, generating employment opportunities and facilitating access to new global prospects, further cementing the UK's position as a science and tech superpower.
With HSBC Innovation Banking's grand entrance onto the tech scene, the stage is set for a new chapter in HSBC's journey. Armed with a vision for innovation and a commitment to supporting startups, HSBC aims to redefine banking services and empower tech entrepreneurs. As HSBC leverages its extensive global network and financial prowess, it is poised to shape the success stories of the tech industry, fostering growth and development on both local and global scales.
