LONDON, March 13 (Reuters) – HSBC (HSBA.L) announced on Monday that it is acquiring the UK subsidiary of ailing Silicon Valley bank for £1, rescuing a key lender to tech start-ups in the UK.
“This acquisition makes a lot of strategic sense for our UK business,” HSBC CEO Noel Quinn said in a statement.
The move comes after US authorities took action to prop up deposits and stem further fallout from the sudden collapse of its parent, tech start-up lender Silicon Valley Bank (SIVB.O).
Following the announcement, the Bank of England said the UK banking system is sound.
“No other UK banks are directly and materially affected by these measures or by the resolution of SVBUK’s US parent bank. The broader UK banking system remains safe, sound and well capitalised.”
SVB UK is shielded from the US group and HSBC said the parent company’s assets and liabilities were excluded from the transaction.
last update
Watch 2 more stories
The deal ends frantic talks between the government, regulators and potential buyers for the UK business over the weekend.
As of March 10, Silicon Valley Bank UK Limited had around £5.5 billion in loans and around £6.7 billion in deposits, HSBC said.
SVB UK’s tangible equity is expected to be around £1.4 billion, HSBC said.
The transaction will be completed immediately, the bank added.
Unlike the United States, the UK has not announced any major liquidity measures for the banking system.
Reporting by Iain Withers; Adaptation by John O’Donnell and Jason Neely
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.