HSBC UK Bank plc, the UK ring-fenced subsidiary of HSBC Holdings plc, has acquired Silicon Valley Bank UK Limited (SVB UK) for £1. This comes after SVB collapsed on Friday morning due to a bank run and capital crisis, leading to the second-largest failure of a US financial institution in history. California regulators closed down the tech lender and placed it under the control of the US Federal Deposit Insurance Corporation (FDIC). The FDIC, which insures bank deposits and oversees financial institutions, stated that all insured depositors would have full access to their insured deposits by no later than Monday morning.
As of 10 March 2023, SVB UK had loans of approximately £5.5bn and deposits of approximately £6.7bn, and recorded a profit before tax of £88m for the financial year ending 31 December 2022. SVB UK’s tangible equity is expected to be around £1.4bn. The acquisition, which completes immediately, will be funded from existing resources, and the assets and liabilities of the parent companies of SVB UK are excluded from the transaction.
Noel Quinn, HSBC Group CEO, stated that the acquisition would strengthen the bank’s commercial banking franchise and enhance its ability to serve innovative and fast-growing firms in the UK and internationally, particularly in the technology and life-science sectors. SVB UK customers will continue to bank as usual, with the knowledge that their deposits are backed by HSBC’s strength, safety, and security.
HSBC will update shareholders on the acquisition during its 1Q 2023 results on 2 May 2023.
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