HSBC acquires Silicon Valley Bank's UK arm for 1 euro
Business
The transaction completes immediately and will be funded from existing resources, the bank added.
LONDON (Reuters) - HSBC said on Monday (Mar 13) it is acquiring the United Kingdom subsidiary of Silicon Valley Bank for £1.
"This acquisition makes excellent strategic sense for our business in the UK," HSBC CEO Noel Quinn said in a statement.
The move comes after United States authorities moved to shore up deposits and stem any wider fallout from the sudden collapse of its parent, tech start-up lender Silicon Valley Bank.
Britain's finance minister Jeremy Hunt also said the government and the Bank of England had facilitated the private sale - in a move which would protect deposits without taxpayer support.
The Bank of England said the wider UK banking system remained safe, sound, and well-capitalised.
"This ensures customer deposits are protected and can bank as normal, with no taxpayer support," Hunt said in a statement on Monday. "I am pleased we have reached a resolution in such short order.
"HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them."
As of Mar 10, Silicon Valley Bank UK Limited had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said.
SVB UK's tangible equity is expected to be around £1.4 billion, HSBC said.
The transaction completes immediately and will be funded from existing resources, the bank added.
Unlike the US, Britain has not announced broader liquidity measures for the banking system.
Friday's dramatic failure of SVB Financial Group, which focuses on tech startups, was the biggest bank collapse in the US since the 2008 financial crisis.
It threatened to have a significant impact on British technology companies, given the importance of the lender to some customers, and more than 250 UK tech firm executives had warned that its failure posed an "existential threat" to the sector.
