Skip to main content

HSBC buys out UK arm of collapsed Silicon Valley Bank for just £1


Tech firms have been handed a lifeline after HSBC stepped in to rescue the UK arm of the collapsed Silicon Valley Bank.

There had been fears UK businesses would have been massively impacted after US regulators shut down the bank on Friday, March 10.

HBSC bought the bank for just £1 and the deal was hammered out over the course of the night to be completed by the start of trading on Monday, March 13.

The deal involved no taxpayer money.

Read More: HSBC to close 114 banks in Britain from April 2023

Customers and businesses who were unable to withdraw funds will now be able to do so as usual.

The Treasury said the deal, which was hammered out with HSBC over the course of the night in order to be completed before trading resumed on Monday, involved no taxpayer money.

Silicon Valley Bank, which specialised in lending to technology companies, was the largest bank failure in the United States since 2008.

Its disintegration sent shockwaves through the tech industry due to the potential impact on businesses, with some firms telling the BBC that they could go bankrupt if deposits were not secured.

According to the government, money in the failed US bank is safe.

Read More: Butternut Box to create Europe’s largest pet food factory with HSBC UK backing

The agreement came after all-night talks involving chancellor Jeremy Hunt, the prime minister, the governor of the Bank of England, HSBC executives, and civil servants to find a solution before firms resumed trading on Monday morning.

The Bank of England said no other UK banks had been “materially affected” by SVB’s collapse and said the wider banking system remained “safe, sound, and well capitalised”.

Although SVB’s UK arm was small, with just over 3,000 business customers, its failure would have posed a risk to a sector that the government considers critical to the UK’s future economic success.

Read More: Marmalade of London eyes international expansion with HSBC backing

Mr. Hunt said such firms were often “fragile”.

He said: “Some of them only had bank accounts with SVB UK and so for that reason, we were faced with a situation where could have seen some of our most important companies, our most strategic companies, wiped out and that would have been extremely dangerous,”

Mr. Hunt insisted there was “never a systemic risk to our financial stability in the UK”.

The deal was a “huge relief,” according to Sebastian Weidt, CEO of Universal Quantum, a tech company that employs about 40 people and holds all of its funds with SVB.

Read More: WHO’S GETTING WHAT? Rio Tinto, HSBC Bank, Barclays Bank

He told the BBC that the last 48 to 72 hours had been “unbelievably stressful,” and said while the company was working to mitigate the potential impact, a deal would have been “pretty detrimental to the entire sector” if one had not been reached.

Mr. Mather said:  “We had enough money in bank accounts outside the UK and enough revenue coming through each week from our customers that we could look our staff in the eyes at nine o’clock this morning and say we can make payroll in two weeks, but it would have been very uncertain from then.”

What went wrong at Silicon Valley Bank?

The rescue comes after the US agreed to a deal for customers in the US bank as well, with all depositors fully protected.

SVB specialised in lending to start-up businesses, and it served nearly half of the US venture-backed technology and healthcare companies that went public last year.

The company began in 1983 as a California bank.

But 30 years on, it was under pressure as higher interest rates made it more difficult for its customers to raise funds through private fundraising or share sales.

More customers were withdrawing deposits, a trend that accelerated last week.

Read More: Barclays to close 15 more branches this year

The bank collapsed on Friday after failing to raise enough capital to cover losses from the sale of assets, primarily US government bonds, that were impacted by higher interest rates.

The failure sparked fears of the demise of many smaller UK tech firms.

It led to more than 200 UK tech CEOs signing a letter to Mr. Hunt pleading for the government to intervene.

According to one source in a tech firm, the collapse could have affected 30 percent to 40 percent of UK start-ups employing up to 50,000 people.

But while the deal with HSBC has been widely received, the Bank of London – a UK clearing bank – said it was a “missed opportunity”.

Read More: Ex-Royal Mail boss believes postal service’s talks with the union have been poorly handled

The bank, which was among firms involved in early-stage talks and had put forward a rescue bid for SVB UK, said: “It cannot be right that, once again, the heritage banks that have provided a poor service to UK entrepreneurs over many years benefit from their already dominant position.”

Due to being much bigger, the failure of its US parent company was a much more dangerous situation.

This explains the approach taken there, where other US banks will help fund its rescue through banking deposit insurance schemes.

Need Career Advice? Get employment skills advice at all levels of your career

The episode highlights the stresses emerging in the financial system as a result of the recent sharp rise in interest rates.

Other stresses may emerge, but experts say this not a sign of impending doom – like that seen when Lehman Brothers went bankrupt – which shook the entire financial system to its core.

The Treasury and the Bank of England will no doubt point to this quick response as an example of lessons learned during the financial crisis, but the fact that a bank with concentrated importance in one sector was sold for £1 raises questions about the regulatory regime.


Follow us on YouTubeTwitterLinkedIn, and Facebook

Facebook owner Meta plans to launch rival to challenge Twitter

Facebook parent Meta

Meta is planning to roll out a decentralized social media platform that could be a direct competitor to Elon Musk’s Twitter.

Platformer reported the new app codenamed “P92” will be stand-alone, but users can log in using their Twitter credentials.

Meta wants to gain Twitter users who are looking for alternatives as the site falters after new owner Elon Musk’s major revamps.

Read More: Meta rumored to be planning latest batch of job cuts after losing 11,000 employees

A Meta spokesperson said: “We’re exploring a standalone decentralized social network for sharing text updates. 

“We believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests.”

Meta’s endeavor would stretch its offerings beyond Facebook, WhatsApp, and Instagram into a field controlled by Elon Musk’s Twitter.

It was reported that Instagram CEO Adam Mosseri is in charge of the project.

Need Career Advice? Get employment skills advice at all levels of your career

Other decentralized social networks, like Mastodon or Jack Dorsey-backed Bluesky, depend on individual servers that use a standard protocol which eliminate centralized control of content and possible censorship.

It’s unclear how long Meta has been working on the P92 product or whether the firm has begun the development process.

Moneycontrol, which first published the news, cited a familiar source who said the plan was still a “work-in-progress.”

Meta is reportedly considering integrations with current social networks such as Twitter or Mastodon, partly relying on a protocol known as ActivityPub.

Source: CNBC

Follow us on YouTubeTwitterLinkedIn, and Facebook.

Barclays could save £200m by pausing payments to staff pension scheme


Barclays could save more than £200 million per year by stopping contributions to its employee pension scheme.

Barclays announced £7 billion in profits for 2022 last month, but its “contribution holiday” means the cost of payments it would normally make towards former employees’ retirement benefits, will now be met by the pension scheme, infuriating some ex-employees.

One retired scheme member, who did not want to be identified, said the bank could afford to take a payment holiday because it was making “huge savings” by limiting annual pension increases for its 72,000 pensioners and dependants to a maximum of five percent.

Read More: Barclays to close 15 more branches this year

They said this was despite inflation currently running at more than 10 percent and the bank could choose to pay more.

They said: “Despite its assets reducing in value from £37.2bn in 2021 to just £27.2bn in 2022 after Liz Truss caused the fund’s value to bomb, Barclays is claiming it has a £2bn surplus and the pension fund can afford the pension contribution holiday that the bank is taking in 2023.”

He said the scheme’s pensioners “are primarily staff who worked in the branch network and at Barclaycard rather than the investment bankers of today.

“They retired on modest pensions that are being eroded by inflation … Barclays should play fair with these former staff.”

While scheme payouts are increased each year in line with retail price index inflation, this is capped at five percent, according to a document obtained by the Guardian, though Barclays has the discretion to award higher increases.

It is understood that the bank is reviewing the arrangement.

Read More: Citigroup and Barclays join rivals in cutting investment banking jobs

According to the scheme member, “the investment banker bonuses continue to be paid” despite the bank’s apparent unwillingness to do so during the cost-of-living crisis.

The bank announced last month bonus payments to employees would total £1.2 billion this year.

Employer pension contribution holidays are legal, but they have long been a source of contention, especially when the companies taking them announce multibillion-pound profits and generous dividend payouts to shareholders.

The Barclays Bank UK Retirement Fund (UKRF) has about 213,000 members, and a newsletter sent to them revealed that on September 30, last year, its assets were valued at £27.2 billion, down £10 billion from the previous year’s figure of £37.2 billion.

The newsletter mentioned the “difficult environment” in 2022. On September 23, Kwasi Kwarteng’s mini-budget shook financial markets, sending government bonds plummeting and forcing some pension funds to close.

Read More Barclays hit by $361m fine from US regulators over trading blunder

The document said the trustees had agreed a pause on Barclays’ pension payments.

As a result, “no contributions are due in 2023. This means the contributions the bank would normally make towards members’ benefits will be met out of the UKRF.”

The trustees said that before agreeing to this, they “thoroughly investigated” the scheme’s financial position, reviewed the rules and took advice, adding: “We have also agreed that this pause on contributions will be tested every 12 months and will only remain in place if the UKRF’s funding surplus is enough to ensure it retains an enhanced low dependency on Barclays.”

Need Career Advice? Get employment skills advice at all levels of your career

In 2021, Barclays’ total employer contributions to the scheme were £999 million, with £273 million described as “normal” contributions to members’ pensions.

The figures for 2022 were £590 million and £256 million.

The payment holiday is understood to apply to these standard contributions.

In a statement, a Barclays spokesperson said: “The UKRF is managed by an independent board of trustees that is responsible for ensuring an appropriate funding position to meet the contractual obligations of the scheme. As noted in its newsletter to members, at 30 September 2022, the funding surplus, which is the difference in value between assets and accrued pension promises, was £2bn. This surplus … acts as a buffer to provide protection against adverse events such as market volatility.”

They added: “Barclays has paid around £4billion in deficit contributions since 2016, which has contributed to the surplus. Our former colleagues are valued stakeholders and … we continue to listen to their feedback.”

SourceThe Guardian

Follow us on YouTubeTwitterLinkedIn, and Facebook

Elon Musk “open to” buying collapsed Silicon Valley Bank

Elon Musk

Elon Musk is “open to” the idea of Twitter acquiring the collapsed Silicon Valley Bank.

The billionaire responded to a suggestion “Twitter should buy SVB and become a digital bank” from Min-Liang Tan, CEO of gaming hardware company Razer.

He replied: “I’m open to the idea.”

Read More: Elon Musk plans to create ‘Texas utopia’ for his employees

The bank was shut down by US regulators on Friday, March 10.

It is the largest failure of a US bank since 2008.

The crash has caused ructions across the tech industry over its possible impact on business, with businesses saying they could go bust if their deposits are not secured.

Musk received mixed reviews for the proposal, with several backing the move while some Tesla investors expressed disapproval.

Read More: FTC looking to oust Elon Musk from Twitter, sources say

Mikael Pawlo, head of branding at Swedish fintech firm Bokio said: “I think Twitter could use a financial leg.

“Would make total sense for the entire Musk ecosystem to buy the ruins of SVB and could also create a viable business model going forward for Twitter.”

Kevin Paffrath, CEO of HouseHack, a real-estate and A.I. startup, tweeted: “What an opportunity. 2-3 years to get a banking charter otherwise. 

“Just make sure you go through those toxic assets with a fine-tooth comb.”

Read More: Elon Musk apologizes after mocking disabled Twitter employee

Musk purchased Twitter for $44 billion in late October.

He plans to include payments into the platform, which a takeover of SVB would probably help with.

It was reported that Twitter has been applying for regulatory licenses and developing software to enable payments on the network.

But not everyone is happy with the prospect of Musk having another distraction.

Read More: Elon Musk regains and loses the world’s richest man title in just 48 hours

Tesla investors, in particular, have been dissatisfied with Musk’s focus on Twitter.

Musk traded billions of dollars in Tesla stock to fund his buyout of Twitter and has been focused on altering the platform.

In December, Leo Koguan, one of Tesla’s top individual shareholders, asked for a leadership change, tweeting: “Elon abandoned Tesla and Tesla has no working CEO. 

“Tesla needs and deserves to have working full time CEO.”

Need Career Advice? Get employment skills advice at all levels of your career

On Friday, a self-described Tesla investor with the Twitter handle @sanssoli reacted to Paffrath’s “opportunity.” 

He replied: “And sell another $20 billion worth of $Tesla stock. No thanks!”

Musk is working to build a new town along the Colorado river where his Texas staff could live and work.

SpaceX and The Boring Company employees could live in new homes at below-market rates.

Source: Fortune

Follow us on YouTubeTwitterLinkedIn, and Facebook.

Northern Ireland could add 33,000 jobs in a decade if it can attract foreign investment

Northern Ireland

Foreign investment in the Northern Ireland economy could generate 33,000 new jobs over the next ten years, a new report suggests.

According to new research from trade and investment advisory OCO Global, the province is poised to build on the progress made over the last 25 years.

The success is dependent on the province demonstrating its “investor friendliness” and political stability.

Read More: How reopening 12 pubs and hotels in the UK will create 1,000 new jobs

The report states this is because the Good Friday Agreement can capitalise on the current international goodwill and the benefits of dual market access to the UK and the European Union.

It also predicted overseas visitor numbers could increase to 5.7 million from 3 million currently, while air route capacity would increase.

The report was released to commemorate the signing of the agreement.

It said the province has enormous potential in the coming years.

Read More: Poundland to open 50 stores that will add around 750 new jobs in the UK

The report said: “Doubling down on the commitments and shared island dimension of the GFA enhanced by a unique dual market access proposition via the Northern Ireland Protocol/Windsor Framework could again accelerate the size and prosperity of the Northern economy, not in 25 years but in 10 years.”

Its forecast follows the announcement that economic output in Northern Ireland has more than doubled since 1998, rising to £43.7 billion today from £19.8 billion in 1998.

GDP per capita has risen to £25,575 from £13,391 over the same period, one of the largest increases of any UK region.

Read More: New plans could mean UK employees can ask for flexible hours as soon as they start jobs

According to the report, outside investment, trade, tourism, and infrastructure investment have transformed the economy.

The economic boost has increased prosperity and life expectancy in Northern Ireland, as well as attracting new residents.

The percentage of people claiming good health has increased to 79 percent of the population, up from 70 percent in 1998, and the population is more diverse, with 5 percent of residents born outside Northern Ireland, up from 1.8 percent in 1998.

Read More: UK tech firm BJSS Inc to open Columbus office with 50 new jobs

The report said: “Clearly, not everyone has felt these benefits to the same degree and we have far too many communities still living in deprivation, but the best way to address these problems is to keep building prosperity whilst ensuring that we give people the means to access the opportunities growth brings,”

Mark O’Connell, Chair of OCO Global, said. “The Good Friday Agreement’s anniversary will focus the world’s attention on Northern Ireland; it is a one-off opportunity to demonstrate that we are investor friendly and, vitally, have political stability.

“There’s a lot of goodwill internationally for Northern Ireland; let’s ensure we make the most of it.”

Need Career Advice? Get employment skills advice at all levels of your career

One of the biggest changes in the economy over the last 25 years has been the shift from a reliance on the public to the private sector, the report said, while the makeup of the largest employers has also changed significantly, as below:

Source:  Business Live

Follow us on YouTubeTwitterLinkedIn, and Facebook

Watch the world’s first fully robotic fast-food restaurant make pizzas in just 9 minutes


The world’s first fully automated pizza restaurant has opened in Israel, and can make nearly one a minute.

Passers-by gawp at the amazing operation seen at Hyper Food Robotics’ operation in Tel Aviv, which is fully run by robots.

There’s not a human to be seen at the company’s 40-foot unit.

Ready-made dough and toppings are sent to the unit at the start of the day, and then the machines take over.

Read More: Frankie and Benny’s owner to close 35 more restaurants

The robots stretch and rotate the dough, then add the exact amount of toppings, bake them to perfection, slice them up and send them to the customer through a hatch.

The whole process takes just nine minutes.

Pizza Hut has also utilized the technology in its Mazor, central Israel, branch, but it is adaptable to any pizza brand.

The customer orders and pays using the app or at a kiosk at the front of the store. 

Read More: How To Expand Your Restaurant Business

Udi Shamai, CEO of Hyper Food Robotics said: “For the first time, people are seeing a robotic store – a fully autonomous store with no workers – and they are amazed.

“And also the fact that you can see the pizza in process, so you can really track what’s being done inside, gives it another layer of excitement.”

The robo-restaurant is outfitted with sensors and cameras to ensure that the robots properly prepare the dough and spread the toppings.

Need Career Advice? Get employment skills advice at all levels of your career

If an issue requires human involvement, it will automatically request assistance.

Every 40 minutes, the robots clean themselves with chemical-free ozone-treated water.

All of the company’s technology was created from scratch.

In the coming months, Hyper Food Robotics, established in 2019, will open its second robo-restaurant in the US.

It’s not the first firm trying to automate fast food, but Shamai says it is the first full-concept autonomous store.

Source: NoCamels

Follow us on YouTubeTwitterLinkedIn, and Facebook.

Skip to content