The UK arm of the Silicon Valley Bank will be bought by HSBC Holdings Plc for a unique amount – £1!
HSBC has released a statement about the ring-fenced subsidiary acquiring Silicon Valley Bank UK.
The announcement comes after US financial regulators took action on Sunday to reassure all depositors that their money is secure in the wake of Silicon Valley Bank’s failure and to establish a new lending programme provided by the Federal Reserve with funds from the Treasury Department.
HSBC Acquires Silicon Valley Bank UK Limited (SVB UK)
The UK division of Silicon Valley Bank is being acquired by HSBC Holdings Plc, marking the end of a hectic weekend during which bankers and ministers looked into various options for preventing the SVB unit’s demise.
The ring-fenced division of the London-listed lender, HSBC UK Bank plc, is buying Silicon Valley Bank UK Limited (SVB UK) for £1, according to a statement released by HSBC on Monday.
As per Chief Executive Officer Noel Quinn, “This acquisition makes excellent strategic sense for our business in the UK. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”
Bank of London Group Also Made Formal Proposal
In response to warnings that the UK’s technology and life sciences industries would be crippled without assistance, ministers and officials spent the weekend developing plans to ringfence those industries. SVB describes itself as “the go-to banking partner for founders, entrepreneurs, and investors,” despite being small in comparison to the UK’s largest banks.
Numerous lenders were suggested as potential buyers, and the government preferred a deal like this. In a statement released on Sunday, the newly formed clearing bank Bank of London Group Ltd. stated that it had made a formal proposal to the Treasury, Bank of England, and the SVB UK board.
As per reports, Among those considering a takeover were OakNorth, a lender backed by SoftBank Group Corp., and Royal Group, an investment company controlled by a prominent Abu Dhabi royal.
In an open letter to Hunt, the CEOs of about 180 tech companies warned that the loss of deposits at SVB could cripple the industry and set the ecosystem back 20 years.
