HSBC Holdings on Monday said that it is acquiring the UK arm of the collapsed Silicon Valley Bank (SVB) for one pound through a private sale that was brokered by the Bank of England and the British government.
“Silicon Valley Bank (UK) Ltd has today been sold to HSBC… Customers of SVB UK will be able to access their deposits and banking services as normal from today,” said a Treasury statement, adding that the deal involved no taxpayer support.
In a statement, HSBC said that the transaction “completes immediately”, adding that the acquisition will be funded from existing resources.
“As at 10 March 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88m. SVB UK’s tangible equity is expected to be around £1.4bn. Final calculation of the gain arising from the acquisition will be provided in due course,” the bank said.
The deal followed intense overnight bidding for SVB UK, with its chief executive Noel Quinn involved in frantic talks with Prime Minister Rishi Sunak, who is currently in California for a defence summit with the leaders of Australia and the US.
Silicon Valley Bank staff offered 45 days of work at 1.5 times pay
According to Sky News, JP Morgan, Barclays, and Lloyds Banking Group were among the large international banks that were asked to consider participating in the pre-insolvency sale process. A Middle Eastern buyer was also said to be one of the leading bidders.
According to the Financial Times newspaper, SVB UK has 3,300 domestic clients, including start-ups, venture-backed companies and funds. Though many have deposits under the £85,000 threshold covered by the financial insurance scheme.
The announcement comes hours after the US government assured to protect the money of depositors, even the uninsured ones, as it races to find potential bidders to acquire the US unit of the SVB.
The US government said that the depositors will be able to access all their cash from Monday (March 13) as it announced a series of emergency measures to restore people’s confidence in the American banking system.
(With inputs from agencies)
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