The Bank of England has moved the UK arm of Silicon Valley Bank into resolution after a £1.8bn liquidity application as its parent company collapsed on Friday.
The BoE said in a statement last night that it plans to use bank insolvency procedures that allow depositors to pay up to £85,000 as soon as possible from the deposit insurance scheme. The liquidator will manage the remaining UK assets and distribute them to creditors, including large depositors.
Financial advisory firm Interpath has been lined up as a possible administrator for the insolvency, according to two people familiar with the matter. Interpath declined to comment.
“SVB UK has a limited presence in the UK and no critical functions supporting the financial system,” the BoE said, after the US regulator took over its American parent company on Friday. He added that the company would stop making payments or accepting deposits.
The decision to call time on SVB UK was taken after the bank applied for the BoE’s discount window, which offers short-term funding to banks, for £1.8bn on Friday.
A spokesman for the UK arm of SVB did not comment immediately.
On Friday afternoon, SVB UK sent a statement on Twitter confirming that it is an “independent banking institution”.
“We appreciate that this is an important time for our clients so we are working hard to support them and give them more context,” said Erin Platts, chief executive and head of SVB UK, in a statement. The tweet has since been deleted.
Created in 2012 as SVB’s first overseas branch, the UK arm became a subsidiary last August. It has a team of 700 people across Europe, the Middle East and Africa, according to a tweet from the official account of the British bank at the award ceremony last week.
Additional reporting by Michael O’Dwyer and Brooke Masters in New York