SAWT BEIRUT INTERNATIONAL

| 31 March 2023, Friday |

Payments firm Wise says it has ‘minimal’ exposure to Silicon Valley Bank

Payments firm Wise became the biggest European company to reveal it held funds in Silicon Valley Bank on Sunday, but a spokesperson said the firm faced “minimal exposure”.

SVB Financial Group, which focuses on tech startups, became the largest bank failure since the 2008 financial crisis, shaking global markets, sending stocks tumbling, and leaving tech founders uncertain about their ability to pay their employees.

London-based Wise, formerly known as TransferWise, processes more than 9 billion pounds ($10.83 billion) in cross-border transactions every month. A company spokesperson told Reuters the firm held a small cash balance in a corporate account with SVB.

“We have minimal exposure to SVB via a credit facility they are part of together with six other major banks, and a small cash balance in an operational corporate account,” a spokesperson said.

 

“It’s not a material amount, and only a fraction of the facility we have with SVB,” they added.

Wise signed a 300 million-pound debt facility deal — a type of loan providing companies with operating capital — with SVB and six other banks, including Citibank and JP Morgan, last year.

A number of financial industry executives and investors have warned the collapse of the bank could have a domino effect on other banks if regulators did not find a buyer over the weekend to protect uninsured deposits.

Advertisement · Scroll to continue

On Sunday, Britain’s Finance Minister Jeremy Hunt said he was working with Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey to “avoid or minimise damage” resulting from the chaos engulfing SVB’s UK arm.

More than 250 UK tech firm executives signed a letter addressed to Hunt on Saturday, calling for government intervention and warning of an “existential threat” to the UK tech sector.

    Source:
  • Reuters