HSBC announced the launch of its HSBC Innovation Banking division today (Monday), integrating the formerly independent Silicon Valley Bank UK (SVB UK) and initiating dedicated innovation teams in the US, Hong Kong, and Israel. This manoeuvre aims to bolster a global, interconnected, specialized banking offering to cater for a wide array of innovative companies and their investors.

From SVB UK to HSBC Innovation Banking

The unveiling took place at London Tech Week, an event focusing on innovation and new technologies. This confirmed the speculation by Sky News in late May that HSBC would want to use the acquired institution as an innovation-focused unit.

HSBC acquired the British division of defunct SVB in March for a mere UK pound after US authorities forced the institution to cease further operations a few days earlier. This subsequently caused panic in the global banking markets. At the time of the acquisition , SVB UK held deposits worth £6.7 billion and granted loans valued at £5.5 billion, recording a pre-tax profit of £88 million in 2022.

However, information provided during London Tech Week, indicates that the unit's operational profile will be transformed into HSBC Innovation Banking. Soon, SVB UK will focus on providing services to a few thousand innovative companies in the UK and worldwide.

"HSBC now has a world-class team focused on innovation companies, their founders, and their investors," Noel Quinn, the Chief Executive Officer of HSBC, commented. On top of that, he mentioned the importance of the tech and life sciences sector to the global economy and highlighted the bank's intention to amplify these capabilities.

The UK Prime Minister, Rishi Sunak, gave his nod of approval, celebrating HSBC Innovation Banking as a resource that will empower innovative companies to harness their potential, generate more employment, and seize new global opportunities.

"The UK is home to world-leading tech and life sciences sectors, and I am proud of the role the British government has played in securing their future and enabling them to thrive," Sunak added.

HSCB Innovation Banking to Boost Startups

Erin Platts, the Head of HSBC Innovation Banking in the UK, explained the role of the new division as a catalyst for UK innovation businesses, facilitating their growth and competitiveness on the global stage.

"Our clients choose us because we understand exactly what it takes for innovators and their investors to achieve success, and we deliver it," Platts stated.

HSBC Innovation Banking plans to combine deep sector expertise, custom client service, robust financial strength, and worldwide reach to support its client base, consisting of approximately 3,000 innovation businesses and funds in the UK. The aim is to foster growth aspirations of tech and life science companies.

The new division comprises over 650 UK employees and employees in the Nordic region, while a specialized team of more than 40 personnel has been assembled across the United States. In addition, a few dozen newly recruited bankers will join the offices in Tel Aviv and Hong Kong.

The deposit-holding legal entity for HSBC Innovation Banking in the UK has been named HSBC Innovation Bank Limited, which was formerly known as Silicon Valley Bank UK Limited. This entity will continue to operate separately as a subsidiary, maintaining its headquarters at the London offices. The HSBC Innovation Banking brand is gradually expected to roll out in the upcoming months globally.

Meanwhile, HSBC Bank USA has been hit with a penalty of $45 million by the US derivatives industry regulator for purportedly allowing 'manipulative and deceptive trading' among its traders and neglecting to maintain records of its business communications. The Commodity Futures and Trading Commission (CFTC) disclosed the financial sanctions in May, confirming that it had reached an agreement with the subsidiary of the multinational British banking corporation.