HSBC, the United Kingdom’s largest bank, introduced a new HSBC Innovation Banking business on Monday, as it aims to expand into the technology industry following its last-minute rescue of failing Silicon Valley Bank (SVB)’s U.K. affiliate in March.
HSBC paid £1 for the London-based SVB business after its parent firm experienced a run on its assets spurred by consumer concerns about the bank’s stability. SVB was one of several lenders in the United States and Europe that failed earlier this year as the global banking system was shaken by broader upheaval.
The purchase was supported by the UK government and the Bank of England in order to preserve depositors, as Britain strives to maintain its position as an international tech powerhouse.
Some have questioned whether HSBC, a traditional banking institution, is best positioned to carry on SVB’s history and fund tech-focused startups and small companies.
Last week, HSBC UK CEO Ian Stuart told CNBC’s Arjun Kharpal that the bank’s activities will range “from seed funding all the way through to IPO, customers will never have to go outside of that network to meet their funding requirements.”
HSBC announced Monday that its Innovation Banking section, which debuted at London Digital Week, will bring together SVB UK and newly created teams in the United States, Israel, and Hong Kong to focus on digital and life science businesses.
“The UK’s world-leading technology and life sciences sectors are critical to growing the UK economy and boosting global exports,” said HSBC Group Chief Executive Noel Quinn in a statement on Monday.
“HSBC now has a world-class team dedicated to innovation companies, founders, and investors.” We will safeguard these specialties and move them to the next level.”
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The new HSBC subsidiary, according to British Prime Minister Rishi Sunak, would help creative enterprises and generate new employment, “supporting my priority to grow the UK economy and cement our position as a science and technology superpower.”