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SIGH OF RELIEF AS HSBC’S ELEVENTH-HOUR £1 DEAL FOR SILICON VALLEY BANK’S UK ARM SAVES THE DAY FOR THOUSANDS OF TECH FIRMS CHARLIE CONCHIE AND CHRISTOPHER DORRELL HSBC came to the rescue of thousands of panicking tech firms yesterday, buying Silicon Valley Bank’s (SVB) stricken UK arm for £1. The transaction, which wasn’t finalised until around 6am yesterday, meant SVB’s more than 3,000 UK customers – almost all of whom are in the innovation and tech
space – were able to access banking services and access their deposits, which they feared they would be shut out of. HSBC emerged as the leading bidder late on Sunday evening and City A.M. understands the bank feels it has given itself ‘scale’ in the high-growth space. “This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to
serve innovative and fast-growing firms, including in the technology and lifescience sectors, in the UK and internationally,” the bank’s chief Noel Quinn said. The deal was brokered by the Treasury and Bank of England after 48 hours of non-stop weekend negotiations. While shareholders were effectively wiped out, tech firms who had feared either a lack of access to working capital
or the loss of sizable, uninsured deposits were full of praise for the government yesterday. Dom Hallas, the executive director of the Coalition for a Digital Economy, told City A.M. the deal had “saved hundreds of the UK’s most innovative companies”. Despite the rescue, bank stocks across the world dragged indices well into the red. The FTSE 100 finished more than 2.5 per cent down, with investors spooked by
the possibility SVB’s downfall in the US could be indicative of a wider problem. Barclays sunk six per cent, with Lloyds and Natwest down around five per cent. Europe’s bank index fell by a similar figure, while in the US concerns were growing around other banks – with fellow Californian operation First Republic seeing shares crash by 50 per cent. £ DEEP DIVE: PAGE FOUR
Down the tubes: Strike action set to bruise and batter central London once again CITY A.M. REPORTERS TUBE train drivers union ASLEF yesterday bragged they were set to “bring London to a standstill” tomorrow, with strike action planned over pensions and conditions. Drivers will walk out across the
network, with only the Elizabeth Line and the London Overground operating as normal. The strike is timed to coincide with the budget, to be delivered in the Commons tomorrow by Chancellor Jeremy Hunt. ASLEF says central government has forced Transport for London (TfL) to
“target staff pensions and working conditions” as part of a bailout deal. While it is true that government has mandated changes to the longterm sustainability of TfL’s pension scheme, the
transport body has yet to announce what changes it will be making. The bailout requires TfL to bring down the annual cost of running the pension scheme by around £100m, down from around
£330m now. The Tube strike comes a day ahead of planned industrial action on the railways on Thursday, though the RMT is no longer set to participate in that action, lessening the impact on commuters. TfL has advised all commuters to plan their journeys carefully.
INSIDE DIRECT LINE’S ‘UGLY AS CAN BE’ RESULTS P3 BRITS SWAP ALCOPOPS FOR FROZEN BERRIES P7 WHAT TO EXPECT FROM THE BUDGET P13 MARKETS P15 OPINION P16-17