Technologies new blogTechnologies new blog

In historic last-minute deal, HSBC acquires Silicon Valley Bank UK, says all depositors’ money is safe

The deal is a massive relief to the UK technology sector, which was highly exposed to the collapse of SVB and it’s uk arm, and will be seen to have supported confidence in the financial system. HSBC said the transaction “completes immediately”. The acquisition will be funded from existing resources. The bank added in a statement:

“As at 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 £88m. SVB UK’s tangible equity is expected to be around £1.4bn. Final calculation of the gain arising from the acquisition will be provided in due course.”

The Bank of England said all depositors’ money with SVB-UK is safe, with the deal ensuring the continuity of banking services. It means SVB UK will not now be put into insolvency. In a statement the BoE said:

“SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.

Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal. SVBUK staff remain employed by SVBUK, and SVBUK continues to be a PRA/FCA authorised bank.

Today’s announcement supersedes the Bank’s 10 March statement that, absent any meaningful further information, it intended to apply to the Court to place SVBUK into a Bank Insolvency Procedure. Given the emergence of a credible purchaser for SVBUK the Bank has determined that using its resolution powers for stabilising failing banks is appropriate.

No other UK banks are directly materially affected by these actions, or by the resolution of SVBUK’s US parent bank. The wider UK banking system remains safe, sound, and well capitalised.”

Dom Hallas, Executive Director of Coadec, the UK non-profit which lobbies government on behalf of tech startups, said: “The Government deserves huge credit. From the very top, to HM Treasury who understood the challenge and gripped it, to the huge number of civil servants who have likely not slept since Friday. They have saved hundreds of the UK’s most innovative companies today.” In historic last-minute deal, HSBC acquires Silicon Valley Bank UK, says all depositors’ money is safe by Mike Butcher originally published on TechCrunch


Press ESC to close