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HSBC to Hire 50 Bankers to Serve Startups Via Venture Lending
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HSBC Holdings PLC (HSBC - Free Report) intends to hire roughly 50 bankers for its U.S. commercial bank to cater to the lending requirements of startup companies, particularly those operating in the technology and healthcare sectors. This was disclosed by Wyatt Crowell, head of U.S. commercial banking at HSBC, in an interview with Reuters.
Since startup companies generally find it difficult to finance their operations from major lenders until they become established, HSBC expects to bridge the gap through an expansion in its offerings, which specifically cater to startups’ unique needs. This will accelerate its penetration to gain market share in the long term. The services offered comprise initial public offerings, overseas expansion, deals and wealth management.
Crowell, said,” There’s this void in the market and we're jumping into it. It's gone way better than I thought it was going to go, both in terms of the volume of deals and our win rate on the deals.”
He further revealed that HSBC has signed up approximately 250 companies as clients for its venture lending business, closed 35 lending deals and signed another 30 term sheets with clients for an average deal size of $15 million.
Having a similar rationale and objective, in July 2023, JPMorgan Chase & Co. (JPM - Free Report) announced its plans to expand globally to enhance collaboration with Innovation Economy (IE) clients. JPM hired senior co-heads to be a part of the company’s IE commercial banking division. JPMorgan established a separate IE Startup Banking Business to cater to the needs of early-stage companies.
HSBC’s current strategic initiative fits under the ongoing restructuring efforts within the organization to boost its operating efficiency. Last year, the company hired roughly 40 people from Silicon Valley Bank after the failure of the latter. In March 2023, it acquired Silicon Valley Bank’s, SVB UK Division, which immensely boosted the company’s ability to serve innovative and fast-growing firms in the technology and life science sectors. The innovation banking business, which was launched in June 2023, included SVB UK and focused on addressing the needs of early-and-mid-stage companies. The business currently has about 60 employees.
“I believe we've got traction in the market and that we're kind of punching above our weight relative to the scale of this team. And that plus our desires to take this global is what is driving the next wave of investment,” Crowell added.
Over the past six months, shares of HSBC have lost 3.7% against the 10.5% growth recorded by the industry.
This week, Huntington Bancshares Incorporated (HBAN - Free Report) announced its intention to expand its commercial banking business in Texas to further extend its reach in the Lone Star State. This move comes amid the business-friendly nature of Texas, attracting a significant number of companies and individuals into the state, hence leading to the growth potential.
HABN expects to attract clients as well as talents given the potential in the market.
In January 2024, Citigroup Inc. (C - Free Report) revealed its plans to launch a wholly-owned investment banking unit in China within the next 12-18 months. The unit will hold job positions for around 30 employees initially, which is expected to increase to almost 100 in the upcoming years.
Per a source familiar with the matter, C already filled senior management roles by hiring three new chief executive officer, chief financial officer and chief compliance officer for the unit.
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HSBC to Hire 50 Bankers to Serve Startups Via Venture Lending
HSBC Holdings PLC (HSBC - Free Report) intends to hire roughly 50 bankers for its U.S. commercial bank to cater to the lending requirements of startup companies, particularly those operating in the technology and healthcare sectors. This was disclosed by Wyatt Crowell, head of U.S. commercial banking at HSBC, in an interview with Reuters.
Since startup companies generally find it difficult to finance their operations from major lenders until they become established, HSBC expects to bridge the gap through an expansion in its offerings, which specifically cater to startups’ unique needs. This will accelerate its penetration to gain market share in the long term. The services offered comprise initial public offerings, overseas expansion, deals and wealth management.
Crowell, said,” There’s this void in the market and we're jumping into it. It's gone way better than I thought it was going to go, both in terms of the volume of deals and our win rate on the deals.”
He further revealed that HSBC has signed up approximately 250 companies as clients for its venture lending business, closed 35 lending deals and signed another 30 term sheets with clients for an average deal size of $15 million.
Having a similar rationale and objective, in July 2023, JPMorgan Chase & Co. (JPM - Free Report) announced its plans to expand globally to enhance collaboration with Innovation Economy (IE) clients. JPM hired senior co-heads to be a part of the company’s IE commercial banking division. JPMorgan established a separate IE Startup Banking Business to cater to the needs of early-stage companies.
HSBC’s current strategic initiative fits under the ongoing restructuring efforts within the organization to boost its operating efficiency. Last year, the company hired roughly 40 people from Silicon Valley Bank after the failure of the latter. In March 2023, it acquired Silicon Valley Bank’s, SVB UK Division, which immensely boosted the company’s ability to serve innovative and fast-growing firms in the technology and life science sectors. The innovation banking business, which was launched in June 2023, included SVB UK and focused on addressing the needs of early-and-mid-stage companies. The business currently has about 60 employees.
“I believe we've got traction in the market and that we're kind of punching above our weight relative to the scale of this team. And that plus our desires to take this global is what is driving the next wave of investment,” Crowell added.
Over the past six months, shares of HSBC have lost 3.7% against the 10.5% growth recorded by the industry.
Image Source: Zacks Investment Research
Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Steps Taken by Other Banks
This week, Huntington Bancshares Incorporated (HBAN - Free Report) announced its intention to expand its commercial banking business in Texas to further extend its reach in the Lone Star State. This move comes amid the business-friendly nature of Texas, attracting a significant number of companies and individuals into the state, hence leading to the growth potential.
HABN expects to attract clients as well as talents given the potential in the market.
In January 2024, Citigroup Inc. (C - Free Report) revealed its plans to launch a wholly-owned investment banking unit in China within the next 12-18 months. The unit will hold job positions for around 30 employees initially, which is expected to increase to almost 100 in the upcoming years.
Per a source familiar with the matter, C already filled senior management roles by hiring three new chief executive officer, chief financial officer and chief compliance officer for the unit.