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SVB Puts Subsidiaries Up For Sale As HSBC Buys UK Unit

The slow dismantling of Silicon Valley Bank Financial continued Monday, as it announced it was seeking “strategic alternatives” for its capital and securities subsidiaries.

SVB Capital — a venture capital and private credit fund platform — and SVB Securities — an investment bank — are separate divisions of the parent holding company and are not part of Silicon Valley Bank itself, which is currently under the jurisdiction of the Federal Deposit Insurance Corp. and the Federal Reserve.

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It also was announced Monday that the bank’s U.K. unit — Silicon Valley Bank UK Limited — was being bought by HSBC UK Bank for a single British pound. SVB UK recorded a profit before tax of about $107 million last year.

The news comes less than a day after banking regulators announced a plan to ensure depositors at Silicon Valley Bank. SVB — the dominant financial institution for much of the venture-backed startup world — was shut down by banking regulators on Friday morning following a dramatic decline in the company’s stock price and reports of a run on its deposits.

Finding a buyer

Before the shutdown, the bank sought a sale, but that has proven to be a tough slog thus far for the financial giant.

On Monday, Axios reported JPMorgan Chase was in talks to acquire SVB Financial Group in a deal that would exclude commercial banking unit Silicon Valley Bank. PMC Financial Services Group, Apollo Management and Morgan Stanley also are in talks, per the report.

While some expected a big bank to step up as a buyer for SVB, its venture debt business may have been a hindrance, said a board member at an unaffiliated bank.

SVB took a chance lending to very young seed and Series A startups, something the Office of the Comptroller of the Currency does not approve of since those companies are not within a year of profitability.

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Illustration: Dom Guzman

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