HSBC said that HSBC UK Bank, its UK ring-fenced subsidiary, has acquired Silicon Valley Bank UK (SVB UK), the British arm of the troubled Silicon Valley Bank, for a nominal price of £1.
The US-based Silicon Valley Bank collapsed recently and was shut down by the California Department of Financial Protection and Innovation (DFPI) due to insufficient liquidity and insolvency.
HSBC said that the acquisition strengthens its banking franchise in the UK.
SVB UK had loans of nearly £5.5bn and deposits of about £6.7bn, as of 10 March 2023. It entered the British market in 2004, and has been catering to the UK technology and life-sciences sectors, helping entrepreneurs, investors, and innovative firms with their banking needs.
For the financial year ending 31 December 2022, SVB UK posted a profit before tax of £88m. Its tangible equity is anticipated to be nearly £1.4bn.
HSBC said that it will provide the final calculation of the gain resulting from the acquisition in due course.
The banking major said that the assets and liabilities of the parent firms of SVB UK are omitted from the transaction.
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.
“We welcome SVB UK’s customers to HSBC and look forward to helping 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 backed by the strength, safety and security of HSBC.”
Separately, FINMA, the Swiss financial regulator, said that it was seeking to identify any possible contagion risks for Swiss banks and insurers after the collapse of Silicon Valley Bank as well as that of another US-based commercial bank Signature Bank.
