The British government and the central bank, the Bank of England, have facilitated a private sale of Silicon Valley Bank UK to HSBC, according to Chancellor of the Exchequer Jeremy Hunt. He stressed that “Deposits will be protected, with no taxpayer support.”
British Government Announces Acquisition of Silicon Valley Bank UK by HSBC
HSBC has acquired Silicon Valley Bank UK (SVB UK), the British subsidiary of Silicon Valley Bank (SVB) that was shut down by U.S. regulators on Friday. British Chancellor of the Exchequer Jeremy Hunt tweeted Monday:
This morning, the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC. Deposits will be protected, with no taxpayer support.
In a filing with the London Stock Exchange Monday, HSBC stated that its U.K. subsidiary, HSBC UK Bank plc, is acquiring Silicon Valley Bank UK Ltd. for £1 ($1.22). The filing details that as of March 10, “SVB UK had loans of around £5.5bn and deposits of around £6.7bn.” Moreover, for the financial year ending Dec. 22, 2022, the filing states that “SVB UK recorded a profit before tax of £88m,” adding that the British subsidiary’s “tangible equity is expected to be around £1.4bn.”
HSBC noted: “The assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The transaction completes immediately. The acquisition will be funded from existing resources.”
Noel Quinn, HSBC Group’s CEO, commented:
This acquisition makes excellent strategic sense for our business in the U.K. 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 U.K. and internationally.
“SVB UK customers can continue to bank as usual,” the executive clarified, adding: “We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.”
In the U.S., the Department of the Treasury, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) have taken measures to protect SVB depositors. They announced Sunday: “Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
What do you think about HSBC acquiring Silicon Valley Bank UK for £1? Let us know in the comments section below.