London: The UK Treasury and the Bank of England have facilitated the sale" of Silicon Valley Bank UK to HSBC, ensuring the security of 6.7 billion pounds (USD 8.1 billion) of deposits. British officials worked throughout the weekend to find a buyer for the UK subsidiary of the California-based bank that failed last week.
This morning, the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC," Treasury chief Jeremy Hunt said in a Tweet. Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise. HSBC said it will acquire Silicon Valley Bank UK Ltd for one pound.
Consequently, the UK government on Monday announced that it has facilitated London-based banking major HSBC to buy the embattled UK arm of Silicon Valley Bank for 1 pound, securing the deposits of more than 3,000 customers worth around 6.7 billion pounds.
Santa Clara, California-based Silicon Valley Bank which specialized in lending to technology companies was shut down by US regulators on Friday in what was the largest failure of a US bank since 2008. According to experts, although the UK arm of SVB was small with only around 3,000 business customers, its collapse would have presented a risk for the tech sector which is seen as crucial to Britain's economic growth.
HSBC said it bought SVB UK which has a balance sheet of 8.8 billion pounds for 1 pound. "This acquisition makes excellent strategic sense for our business in the UK," HSBC said. "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," said Noel Quinn, HSBC group chief executive.
