HSBC Holdings PLC (LSE:HSBA) announced on Monday that its UK subsidiary, HSBC UK Bank, is acquiring Silicon Valley Bank UK for £1.
Reports over the weekend suggested there were a number of interested parties battling to buy the business which is the UK arm of stricken US bank Silicon Valley Bank which was closed by US regulators on Friday.
The FTSE 100 lender said that, as of 10 March 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88mln.
SVB UK's tangible equity is expected to be around £1.4bn while a final calculation of the gain arising from the acquisition will be provided in due course, the bank added.
HSBC said the assets and liabilities of the parent companies of SVB UK are excluded from the transaction which will be funded from existing resources and completed immediately.
In a statement, Noel Quinn, HSBC Group CEO, commented "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.”
Commenting on the deal, chancellor, Jeremy Hunt, said: “Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.
“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”