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High street banks lure tech firms away from Silicon Valley Bank UK after HSBC rescue deal

 (REUTERS)
(REUTERS)

High Street banks are quietly stepping up their efforts to lure startups away from Silicon Valley Bank UK as the beleaguered firm’s customers weigh up whether to keep their accounts open after a last-minute rescue deal by HSBC.

The Canary Wharf-based bank wrote yesterday to calm SVB UK’s customers, telling them it had poured close to £2 billion of extra liquidity into the bank and adding that it was “ready to deploy more cash and liquidity as needed.”

All tech firms and venture capital businesses contacted by the Standard said they planned to continue banking with SVB UK in the short term following the collapse of its US parent, but some said they had seen a marked increase the availability of attractive alternatives.

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Seb Wallace, a venture capital investor at Triple Point, said: “The learning is that all companies need more than one or two main bank accounts.

“It seems like the other major UK banks, who historically have been difficult to open accounts with, have adopted a more pragmatic, startup-friendly approach in the last three days. Hopefully it continues.”

A group of London-based venture capital businesses signed a petition over the weekend, vowing to stick with SVB UK if it could be rescued in light of its “pivotal role” in supporting small businesses.

But some firms have already expressed their doubts about whether HSBC is a perfect fit for the startup-focussed bank.

One SVB customer told the Standard: “We were with HSBC before and moved away because their relationship management is rubbish and they were not SME friendly.

“If they don’t keep the best of SVB we will not stay long term.”

Russ Shaw, founder of Tech London Advocates, said: “A lot of people feel good about what HSBC did and want to give them the benefit of the doubt.

“[But] high street banks have made efforts to woo startups to open accounts with them and I didn’t see HSBC as much as I saw the others.”

HSBC’s new ‘Growth Lending’ scheme to help UK tech businesses to scale up, launched in July last year, has been seen by some as a reassuring sign the bank is taking the value of the UK tech sector seriously.