HSBC to buy UK subsidiary of bankrupt SVB for £1

HSBC UK Bank, a division of HSBC Holdings Plc, is acquiring Silicon Valley Bank UK Limited (SVB UK), the British subsidiary of the American SVB, declared bankrupt on March 10. The transaction amount will be 1 British pound, reported on the holding website.

“SVB UK customers can continue to operate as usual, confident that their deposits are backed by HSBC’s security. We warmly welcome colleagues from SVB UK to HSBC and we are excited to start working with them,” said HSBC Group CEO Noel Quinn.

The acquisition will strengthen the bank’s strategic strength in the UK and enhance its ability to work with the UK’s technology companies, he added.

As of March 10, SVB UK had around £5.5bn in loans and around £6.7bn in deposits, the report said. SVB UK’s pre-tax profit for the fiscal year ended in December was £88m.

As noted The Independent And BBC, the deal came after the intervention of the UK government amid the “serious risk” to which about 200 British technology companies were exposed due to the collapse of SVB UK. According to the BBC, a number of companies immediately warned of the risk of ruin without outside help, and London considers this sector a key one for the country’s economic growth in the future.

“Today the government and the Bank of England facilitated the private sale of Silicon Valley Bank UK. This ensures that customer deposits are protected…HSBC is the largest bank in Europe and SVB customers in the UK need to be confident in the strength, reliability and security that they provide,” said Chancellor of the British Exchequer Jeremy Hunt.

British Prime Minister Rishi Sunak also took part in the overnight talks.

The bankruptcy of Silicon Valley Bank Financial Group (SVB) became known on March 10. The credit institution was based in California, ranked 16th among the largest banks in the United States and specialized in working with startups in Silicon Valley.

The Federal Deposit Insurance Corporation (FDIC) has assured that all SVB branches will open on March 13 and depositors will have full access to their insured deposits. But, according to the regulator, 89% of deposits ($175 billion) at the end of 2022 were not insured and their fate remains to be determined.

As The Associated Press noted, the collapse of SVB was the second largest bankruptcy in US history after the closure of Washington Mutual in 2008.

Today, March 13, the US authorities announced closing Signature Bank due to systemic risks. All depositors, as in the case of SVB, will have full access to their accounts, and the taxpayer will not suffer any losses. The top management of the bank has been suspended from work.