Bank of London bids to acquire Silicon Valley Bank’s UK arm

Global clearing house Bank of London has submitted a formal proposal to acquire Silicon Valley Bank’s UK subsidiary, according to a statement disclosed by Reuters on March 12.

According to the statement, the purchase is an attempt by a consortium of private equity firms:

“A consortium of leading private equity firms, led by The Bank of London, confirms that it has submitted formal proposals to HM Treasury, The Prudential Regulation Authority at the Bank of England and the board of Silicon Valley Bank UK.”

Reuters previously reported that other UK financial institutions were undergoing similar moves, including SoftBank-owned lender OakNorth Bank. Abu Dhabi Investment vehicle ADQ was also interested in SVB’s arm.

A plan to rescue startups and tech companies hit by SVB’s collapse has been drawn up by UK authorities. The contingency plan will include a cash lifeline for a number of companies.

Prime Minister Rishi Sunak said the government is working “at pace” to deliver a plan in the coming hours that will secure “operational liquidity and cash flow needs” for Silicon Valley Bank’s UK clients. The UK Treasury said in a statement that it “will set out immediate plans to ensure that the short-term operating and cash flow needs of Silicon Valley Bank UK customers can be met.”

On 10 March, the Bank of England (BoE) suspended the operation of SVB branches, stating that the bank has a “limited presence” in the UK and no “critical functions” supporting the financial system. However, a letter signed to over 200 founders and CEOs of UK technology companies claimed that many fintech companies managed banking operations through the SVB and “will therefore go into liquidation immediately unless preventive measures are taken.”

US regulators and White House officials are reportedly working over the weekend to resolve the SVB collapse. Treasury Secretary Janet Yellen noted during an interview that a major bailout is not being considered, but investor protection efforts are underway.

The US Federal Deposit Insurance Corporation (FIDC) reportedly started an auction process on March 11 night for Silicon Valley Bank. Bids are reportedly open for just a few hours before the process closes later on Sunday.