British clearing bank The Bank of London is considering launching a bid for the UK arm of Silicon Valley Bank, it was reported on Saturday. The UK bank has appointed investment bank Perella Weinberg Partners to advise it as it explores the feasibility of acquiring Silicon Valley Bank UK Limited.
The decision to explore a rescue bid comes after the SVB parent company was taken over by U.S. regulators on Friday. Following this development, the Ban of England pursued a court order to place the UK branch of SVB into an insolvency procedure.
Focusing on providing banking services to tech startups, SVB’s profitability tanked when borrowing costs surged, and therefore, the profitability of tech was curbed once the U.S. Federal Reserve began to embrace a stricter monetary policy.
At the same time, the higher interest rates eroded the value of the bank’s long-term bonds. This, together with the drying up of venture capital activities, saw the bank incur losses on all fronts.
With $209 billion in total assets at the end of 2022, SVB’s downfall is the largest banking failure since the 2008 financial crisis.