London pre-open: Stocks seen muted; HSBC buys SVB's UK arm

London stocks were set for a muted open on Monday as investors continued to assess the impact of the SVB fallout and looked ahead to this week’s budget.

The FTSE 100 was called to open steady at 7,748.

HSBC has bought the UK arm of stricken Silicon Valley Bank for a nominal £1, after a night of frantic negotiations involving government ministers and Bank of England officials.

Talks took place over the weekend on a private sale of SVB UK and a plan to help depositors in the lender in an effort to avoid a state bailout. US regulators on Sunday evening said that SVB’s American depositors would have access to all of their money on Monday.

"This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally," said HSBC chief executive Noel Quinn.

The collapse of SVB's US-listed parent company, now under government control, is one of the biggest since the global banks caused the financial crisis of 2008, leading to bailouts of the sector around the world, much to the anger of taxpayers.

Elsewhere, online greeting card and gift retailer Moonpig and media group Future both said that they had no material exposure to SVB UK.

Moonpig said it has no cash on deposit with SVB UK and does not hold a bank account with them.

"SVB UK is one of ten lenders that provide senior debt facilities to the group as part of a strong banking syndicate," it said, adding that the company has significant liquidity headroom.

Utilised and available facilities together total £242m, which are committed until 8 December 2025. This excludes the £13m undrawn portion of SVB UK's commitment.

Meanwhile, Future said its exposure to SVB was immaterial to the group’s liquidity. As at 10 March, cash deposits with SVB accounted for less than 3% of its cash on hand, equivalent to less than £1m, it said.

It noted that SVB also provided £50m of its £900m total debt facilities. Of this £50m, around 48% is currently drawn.

"The group backed by a strong banking syndicate, has access to significant levels of liquidity," Future said.

As at 10 March, it had access to £26m cash on hand and £438m of undrawn committed facilities excluding SVB's undrawn hold.