On Monday, HSBC announced that it would be acquiring the UK subsidiary of Silicon Valley Bank for a nominal sum of £1. This move is expected to provide a lifeline to a critical lender for technology start-ups in Britain. HSBC CEO Noel Quinn stated that this acquisition would make excellent strategic sense for their business in the UK.
The US authorities had taken steps to stabilize deposits and prevent any wider implications after the sudden collapse of Silicon Valley Bank, the parent company of SVB UK. Following the announcement, the Bank of England reassured that Britain’s banking system was sound, and no other UK banks were directly affected by these actions.
SVB UK is independent of the US group, and the assets and liabilities of the parent company are not included in the transaction. The deal ended the frantic negotiations between the government, regulators, and potential buyers for the UK business over the weekend.
According to HSBC, as of March 10, Silicon Valley Bank UK Limited had loans of approximately £5.5 billion and deposits of around £6.7 billion. The tangible equity of SVB UK is expected to be around £1.4 billion.
The bank added that the transaction would be completed immediately. Unlike the United States, the UK has not announced any broader liquidity measures for the banking system.