- The acquisition of Silicon Valley Bank refers to a great strategic sense for HSBC’s business in the U.K.
- The move will amplify the commercial banking franchise of HSBC and increase its potential to support growing and innovative companies.
- The action happened after US authorities’ decision to boost deposits and stop any wider aftereffect from the unexpected crash of Silicon Valley Bank.
According to HSBC Holdings Plc, HSBC U.K. Bank, its U.K. ring-fenced subsidiary, is obtaining Silicon Valley Bank U.K. for £1, as stated in a filing.
SVB U.K. had loans of over $6.6 billion and deposits of over $8.1 billion, as per the filing.
HSBC Group CEO Noel Quinn said that the acquisition makes great strategic sense for their business in the U.K. The move will enhance their commercial banking franchise and increase their potential to assist advanced as well as rapidly-growing companies, which includes technology and life-science areas not only in the U.K. but internationally too.
The sale was promoted by the government of the U.K. under resolution powers created to terminate failing lenders without damaging the financial system. Jeremy Hunt, the finance minister, tweeted that the deposit will be secured without taxpayer support. He added that he worked immediately to protect the technology sector of the country.
On Friday night, the Bank of England took to Twitter to announce that SVB U.K. would be kept in bankruptcy; however, the lender’s presence in the country was restricted.
According to the U.S. regulators, SVB depositors would access funds while trying to stop the biggest bank failure since 2008 from sabotaging trust in the financial system.