HSBC said on March 13 it is acquiring the U.K. subsidiary of stricken Silicon Valley Bank for £1, rescuing a key lender for technology start-ups in Britain.
“This acquisition makes excellent strategic sense for our business in the UK,” HSBC CEO Noel Quinn said in a statement.
The move comes after U.S. authorities moved to shore up deposits and stem any wider fallout from the sudden collapse of its parent, tech start-up lender Silicon Valley Bank.
After the announcement was made, the Bank of England said Britain’s banking system was sound.
“No other U.K. banks are directly, materially affected by these actions, or by the resolution of SVBUK’s U.S. parent bank. The wider U.K. banking system remains safe, sound, and well capitalised.”
SVB U.K. is ringfenced from the U.S. group, and HSBC said the assets and liabilities of the parent company were excluded from the transaction.
The deal brings to an end frantic talks between the government, regulators, and prospective buyers for the U.K. business over the weekend.
As of March 10, Silicon Valley Bank U.K. Limited had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said.
SVB U.K.’s tangible equity is expected to be around £1.4 billion, HSBC said.
The transaction completes immediately, the bank added.
Unlike the United States, Britain has not announced broader liquidity measures for the banking system.