HSBC said on Monday it acquired the UK subsidiary of Silicon Valley Bank for an amount that’s less than one month’s subscription of Hotstar in India. The Bank completed the acquisition for 1 British pound. In a statement, Bank of England said, “The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC).” It further said that the action has been taken to stabilise SVB UK and to ensure the continuity of banking services, minimise disruption to the UK technology sector and to maintain the confidence in the financial system.
The move came just after SVB UK, on March 10, had said that it intended to apply to the Court to place SVB UK into a Bank Insolvency Procedure. Post the acquisition, as Bank of England announced, the business at SVB UK will continue to be operated by the bank itself and all the services will operate as normal. “Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal,” the statement said.
HSBC said that as of March 10, SVB UK has loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds. It further added that SVB UK’s tangible equity is expected to be around 1.4 billion pounds. The acquisition, as informed by HSBC, stands complete and the transaction is being funded from existing resources. For the financial year ending December, 31, 2022, SVB UK had recorded a profit before tax of £88 million.
In a statement released by HSBC, HSBC Group CEO Noel Quinn 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 firms, including in the technology and life-science sectors, in the UK and internationally.” HSBC will update shareholders on the acquisition in its 1Q 2023 results on May 2, it added.