Global banking giant HSBC Holdings is coming to the rescue of Silicon Valley Bank’s collapsing UK branch with a new acquisition.
HSBC officially announced on March 13 that its subsidiary HSBC UK Bank acquired Silicon Valley Bank UK Limited for one British pound sterling (GBP), or $1.21.
As of March 10, 2023, SVB UK had approximately GBP 5.5 billion ($6.7 billion) in debt and approximately GBP 6.7 billion ($8.1 billion) in deposits, HSBC said in the announcement.
For the financial year ending December 31, 2022, SVB UK recorded a profit before tax of 88 million GBP ($107 million). The actual equity of SVB UK is estimated to be approximately 1.4 billion GBP ($1.7 billion).
“The final calculation of the gain arising from the acquisition will be provided in due course,” HSBC wrote, adding that the assets and liabilities of the parent company SVB UK are excluded from the transaction. The company added that the acquisition will be funded from existing resources and will be completed immediately.
According to HSBC Group CEO Noel Quinn, the acquisition makes “excellent strategic sense” for HSBC’s UK business, strengthening our commercial banking franchise and increasing our ability to serve innovative and fast-growing companies. He added:
“We welcome SVB UK customers to HSBC and hope to help them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are made by the strength, safety and security of HSBC .”
The news comes shortly after US authorities ordered SVB to close operations on March 10, causing a wave of panic in the crypto market as some major crypto companies like Circle and Coinbase have significant exposure to the bank.
This is a developing story, and further information will be added as it becomes available.