The fall of Silicon Valley Bank for a minute took us back to 2008 and 2009 during the financial market crash and the fall of Lehman Brothers, Benstairs and others. Thanks to God HSBC UK came to the rescue of Silicon Valley Bank, which means the depositors’ money is sad and in good hands.
According to the financial reports HSBC acquired the bank for a symbolic £1. The deal comes after a tense weekend of frantic negotiations by the U.K. government, regulators.
The deal is a massive relief to the U.K. technology sector, which was highly exposed to the collapse of both SVB and its U.K. arm. The quick turnaround of the deal will be seen as a signal of the government’s support of tech, and overall confidence in the financial system.
“As at 10 March 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88 million. SVB UK’s tangible equity is expected to be around £1.4 billion. Final calculation of the gain arising from the acquisition will be provided in due course,” said HSBC UK.
The Bank of England in a press statement said, “SVB UK’s business will continue to be operated normally by SVB UK. All services will continue to operate as normal and customers should not notice any changes. Customers can continue to contact SVB UK through the usual channels and borrowers should make any loan repayments to SVB UK as normal. SVB UK staff remain employed by SVB UK, and SVB UK continues to be a PRA/FCA authorised bank.”
Noel Quinn, HSBC Group CEO, welcomed Silicon Valley Bank UK customers in a statement, “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 firms, including in the technology and life-science sectors, in the UK and internationally.”
Silicon Valley Bank UK has received the lifeline and now can operate as a business as usual and continue servicing its clients.