Wise insists its exposure to Silicon Valley Bank is "minimal"
- Wise is the largest European company to have funds in SVB via a credit facility and a corporate account.
- Through a spokesperson, it insists that its exposure to the bank is "minimal".
London-based Wise has become the largest European firm so far to disclose that it has some funds in the collapsed Silicon Valley Bank (SVB). However, it has been quick to add that its exposure is “minimal”.
The company’s spokesperson stated, “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. It is not a material amount, and only a fraction of the facility we have with SVB”.
Wise, which was previously formerly known as TransferWise, enables customers to send, receive, and spend funds in over 50 currencies. It processes over 9 billion pounds every month in the form of cross-border transactions. Interestingly, the payments company rebranded at the start of March 2023 as it strives to reach 16 million customers globally.
SVB is the second largest American bank collapse on record after Washington Mutual during the 2008 financial crisis. Analysts largely associate SVB’s crisis to high interest rates and the resultant surge in borrowing costs. Amid interest rate hikes by the Federal Reserve and other major central banks, financial markets are alarmed that the bank’s collapse may spill over to other institutions.
Last year, Wise signed a debt facility deal worth 300 million pounds with SVB, JP Morgan, Citibank, and four other banks. The type of loan in question provides businesses with operating capital.
On Sunday, UK’s Finance Minister Jeremy Hunt stated that he is working closely with the England Governor Andrew Bailey and Prime Minister Rishi Sunak to “avoid or minimise damage” stemming from SVB’s UK division.