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HSBC acquired the UK arm of SVB.

 

HSBC building
HSBC has acquired the UK arm of Silicon Valley Bank for £1 after a weekend of crisis talks with the Bank of England and government ministers following the collapse of the bank’s US parent.

Noel Quinn, chief executive of HSBC, said the acquisition made strategic sense for its business in the UK. «It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally».

In a brief stock exchange statement, Europe’s biggest bank said SVB UK had loans of about £5.5 billion and around £6.7 billion in deposits. For the financial year ending 31 December 2022, SVB UK recorded a profit of £88 million before tax. It said it would update shareholders further alongside first-quarter results in May.

Jeremy Hunt, the chancellor, spent the weekend in talks with the Bank of England and financial regulators to contain the fallout from the collapse of Silicon Valley Bank in America on Friday.

Hunt said this morning: «The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector».

He said the sale of Silicon Valley Bank UK to HSBC «ensures customer deposits are protected and can bank as normal, with no taxpayer support».

In a separate announcement, the Bank of England said it had taken to sell the SVB to HSBC has been taken in consultation with the Prudential Regulation Authority, HM Treasury and the Financial Conduct Authority.

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  1. Alex13 March 2023 at 09:39

    That was fast! But I guess they got it at a good price and it was a good deal for both parties overall. SVB is trying to reduce the impact of what happened in the US and HSBC needs to expand.

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    Replies
    1. Neil13 March 2023 at 12:27

      They saw an opportunity and took it. SVB is in dire need of funds right now and anything helps. It's important to remember that what happened to SVB can happen to pretty much any bank, if the conditions are right or in this case "wrong".

      Delete

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