TECH firms across the island of Ireland heaved a sigh of relief on Monday following the sale of Silicon Valley Bank UK (SVB UK) to HSBC.
More than 100 firms across the island, including around one dozen start-ups based in Northern Ireland, were left exposed by the US bank’s collapse on Friday.
Along with the northern tech firms, it’s understood the UK arm of the California-based lender had signed up a considerable number of companies across the border in recent years, offering better terms than some Irish banks.
The sale to HSBC for a nominal sum of £1 was agreed after all-night talks between the UK Government and the Bank of England on Sunday night, amid fears some of the UK's leading tech companies could have been wiped out.
UK Chancellor Jeremy Hunt confirmed that all customer deposits have been protected under the sale to HSBC, with no taxpayer cash involved.
He said customers and businesses, who had been left unable to withdraw money since the Friday collapse, are now able to access cash as normal.
The US government also moved to stop a potential wider banking by stepping in to protect all customer deposits.
Belfast native Ian Browne, who heads the Republic’s government-backed national start-up accelerator programme, the NRDC, said most of the exposure both north and south was to SVB UK.
“It was a rollercoaster weekend,” he said. “There were a lot of rumours flying about, questions if there was going to be a run on other banks.
“I know of eight to ten in Northern Ireland who were affected, but there's probably more than that.
“I had founders at the weekend reaching out on both sides of the border, who had their accounts frozen, who wouldn't have been able to make payroll next week, or certainly for the next month anyway.
“And so it was a real existential crisis and nobody knew what was going to happen. It was it was very real for founders here.”
While the government intervention has been described in some quarters as a ‘tech bail out’, Mr Browne said many of those left exposed at the weekend were early stage companies, adding that the risk was “wiping out potential innovation in the next five years” in areas including healthcare.
Speaking in the House of Commons on Monday evening, UK Treasury minister Andrew Griffith said that disruption in the tech sector had been "forestalled" following SVB UK’s sale to HSBC.
"We've been able to achieve this outcome - the best possible outcome - in short order, without any taxpayer money or Government guarantees. There has been no bailout and the actions taken are a win for customers, taxpayers and the banking system.
"The transfer of SVB UK to a buyer has allowed the Treasury to limit the risks to public funds by ensuring that shareholders and creditors, rather than depositors, bear losses."
Meanwhile, speaking in Brussels on Monday, the Republic’s Finance Minister Michael McGrath said he had tasked the Financial Stability Group to carry out an assessment on any impact from SVB’s collapse on the Irish economy.
