HSBC has acquired the UK arm of failed US financial institution, Silicon Valley Bank (SVB), for a symbolic one pound in a rescue deal led by Prime Minister Rishi Sunak and the Bank of England.
Markets shook on Friday following the downfall of California-based SVB after US regulators shut down its operations. The rapid collapse particularly affected digital asset companies and technology start-ups.
The crisis in the UK was averted due to the overnight decision of HSBC UK Bank plc, the British subsidiary of the HSBC Holdings plc, to acquire SVB UK.
Noel Quinn, the CEO of HSBC Group, 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.
The UK Financial Conduct Authority issued a statement on Monday that it has been working closely with Bank of England and the UK Authority in the sale of SVB UK. The UK regulator noted that the UK bank remains authorised to operate.
The FCA stated:
SVBUK remains authorised by the PRA and FCA. It will operate as normal and the Bank of England and HM Treasury have confirmed depositors’ money is safe as a result of the transaction.
