Britain’s biggest high street banks have been given a 24-hour deadline to rescue Silicon Valley Bank UK (SVB UK) from collapse as the Bank of England prepares to place it into an insolvency process.

Sky News has learnt that major UK lenders including Barclays and Lloyds Banking Group are among the parties to have been approached by the board of SVB UK over the weekend to see if an emergency takeover deal can be struck.

City sources said that a number of parties, including The Bank of London, were interested in finalising a deal.

A number of the biggest high street banks are expected to examine the prospects for a deal, although the chances of one of them intervening appeared remote.

An executive at one large UK bank said they had been given access to a data room over the weekend.

Rothschild, the investment bank, has been asked to handle the quickfire process with the permission of the Bank of England, according to one source.

The Treasury said in a statement on Sunday that the government was working on funding solutions to help hundreds of SVB UK clients meet cashflow obligations.

Households on prepayment meters will not pay more than those on direct debits, chancellor to promise

Thames Water braced for crunch talks over £14bn debt-pile

Growth pains: Ahead of Jeremy Hunt’s first budget, we ask what’s holding the British economy back?

“The UK has a world leading tech sector, with a dynamic start-up and scale-up ecosystem,” it said.

“The government recognises that, given the importance of Silicon Valley Bank to its customers, its failure could have a significant impact on the liquidity of the tech ecosystem.

“The government is treating this issue as a high priority, with discussions between the governor of the Bank of England, the prime minister and the chancellor taking place over the weekend.

“The government is working at pace on a solution to avoid or minimise damage to some of our most promising companies in the UK and we will bring forward immediate plans to ensure the short term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.”

Read more:
UK tech firms at ‘serious risk’ from SVB failure, warns chancellor
Bank of London weighs rescue bid for UK arm of Silicon Valley Bank
Biggest failure since 2008 financial crisis as US regulators close bank and seize assets

Please use Chrome browser for a more accessible video player

The implosion of SVB’s US-listed parent company, which has been taken into government control, represents one of the biggest global banking collapses since the financial crisis of 2008.

UK depositors stand to receive up to £85,000 as part of the resolution of the British arm of SVB, sparking fears about the fate of substantial amounts of funding in the start-up community.

Be the first to get Breaking News

Install the Sky News app for free

On Saturday, dozens of early-stage companies wrote to Jeremy Hunt, the chancellor, to warn of “an existential threat to the UK tech sector”.

In a letter seen by Sky News, founders including those from Adzuna, Curve and Thriva called on Mr Hunt to intervene.

“The majority of the most exciting and dynamic tech businesses bank with SVB and have no or limited diversity in where their deposits are held,” the draft letter said.

“This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.

“The impact of this is far greater than our individual businesses.

“The Bank of England’s assessment that SVB going into administration would have limited impact on the UK economy displays a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in the future.”

The founders warned Mr Hunt, who will deliver his Budget statement on Wednesday, that the collapse of SVB UK would “cripple the sector and set the ecosystem back 20 years”.

“Many businesses will be sent into involuntary liquidation overnight,” they wrote.

“Many other businesses, both in the tech sector and the wider economy – the customers and suppliers of these businesses – will be negatively impacted by these businesses going bankrupt.”

Interpath Advisory is being lined up to handle the insolvency process in the UK.

Related posts:

BA parent demands digital health passes to help reopen skies as it dives to £6.5bn loss David Beckham-backed cannabis venture scores dizzy high on market debut NatWest braced for budget delay to privatisation target Deliveroo says orders have doubled but growth will slow as lockdowns ease World’s biggest carmaker rues hit from COVID sickness and chip shortage Sunak urged to help firms facing ‘eye watering’ cost increases Russia scrambles to pay its way as prospect of messy default looms large VW picks Deutsche Bank for $100bn Porsche float slot Barclays snaps up stake in $2bn cryptocurrency firm Copper Ryanair warns of rising fuel costs – while reporting profit in first quarter Persimmon shares knocked as toxic cocktail of pressures hit housebuilders Metro Bank fined £10m for publishing ‘incorrect information to investors’