HSBC To Acquire Silicon Valley Bank (SVB UK) For 1 Pound

Updated: 13 March 2023

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What- HSBC Acquires SVB UK bank for 1 pound
Why-This is after the SVB UK bank collapsed early last week
What Next-HSBC welcomes all customers on board as it plans to notify its shareholders of the acquisition on May 2.

The Silver Valley Bank (SVB UK) closure has undoubtedly shocked the financial sector. However, the users have been relieved by the regulators stepping into the picture. Moreover, the UK Chancellor, Jeremy Hunt, has confirmed the acquisition of SVB UK by HSBC for 1 pound. That translates to approximately $1.21.

According to the filing, as of March 10, 2023, the collapsed bank had loans of around 5.5 billion pounds and deposits worth 6.7 billion pounds. However, the assets and liabilities of the parent platforms are excluded from the transaction. Nonetheless, HSBC Group CEO, Noel Quinn, has said:

This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing companies. This includes the technology and life-science sector in the UK and internationally.

Additionally, the finance minister, Jeremy Hunt, asserted via Twitter that:

Deposits will be protected without taxpayer support. But, as I said yesterday, we would look after our tech sector, and we have worked urgently to deliver the promise.

Reportedly, the Silicon Valley Bank collapse left over 200 UK platforms unable to pay their staff. Notably, the country’s treasury stipulated that it wants to decrease the damage to some of our firms in the UK,” following the collapse. However, the Bank of England tweeted that SVB UK bank would be put into insolvency. This is because it had a limited presence in the UK and no critical functions supporting the financial systems. In the interim, the firm will stop making payments or accepting deposits.

SVB UK warm welcome to HSBC

However, the HSBC Group CEO has welcome the SVB UK colleagues and customers to the company. The CEO noted:

We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and globally. SBV UK customers can continue to bank as usual, safe in the knowledge that the strength, safety, and security of HSBC back their deposits. We are excited to start working with them.

Noteworthy, HSBC will update shareholders on the acquisition in its first quarter results on May 2, 2023.