The British government and 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, without taxpayer support.”
The British government announces the acquisition of Silicon Valley Bank UK by HSBC
HSBC has acquired Silicon Valley Bank UK (SVB UK), the UK subsidiary of Silicon Valley Bank (SVB) which was shut down by US regulators on Friday. British Chancellor of the Exchequer Jeremy Hunt tweeted on 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, without taxpayer support.
In a filing with the London Stock Exchange on Monday, HSBC said its UK subsidiary, HSBC UK Bank plc, will acquire 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”. Furthermore, for the fiscal year ending December 22, 2022, the filing states that “SVB UK recorded a pre-tax profit of £88 million”, adding that “tangible capital of the UK subsidiary is expected to be around £1.4 billion”.
HSBC noted: “The assets and liabilities of SVB UK’s parent companies are excluded from the transaction. The transaction is completed immediately. The acquisition will be financed with existing resources.”
Noel Quinn, CEO of the HSBC Group, commented:
This acquisition makes excellent strategic sense for our UK business. It strengthens our commercial banking franchise and enhances our ability to serve fast-growing and innovative companies, including in the technology and life sciences sectors, in the UK and internationally.
“SVB UK clients can continue with their banking operations as usual,” the executive clarified, adding: “We warmly welcome our colleagues from SVB UK to HSBC, we are excited to start working with them.”
In the US, the Treasury Department, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) have taken steps to protect SVB depositors. They announced on Sunday: “Depositors will have access to all their money starting Monday, March 13. The taxpayer will not bear any loss associated with the resolution of Silicon Valley Bank.”
What do you think about HSBC buying Silicon Valley Bank UK for £1? Let us know in the comments section.
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