HSBC has acquired collapsed Silicon Valley Bank’s UK unit for £1, in a symbolic move to rescue the tech lender following the biggest bank collapse since the 2008 Financial Crisis over the span of a weekend.
On Monday, HSBC announced it had purchased SVB’s UK bank in a private sale facilitated by the British government and the Bank of England, shortly after the latter entity unveiled it would place the disgraced tech lender’s subsidiary into an insolvency procedure.
According to HSBC, SVB UK has approximately £6.7 billion worth of deposits and £5.5 billion in loans, with profits before tax totalling £88 million last year. “This acquisition makes excellent strategic sense for our business in the UK,” explained HSBC CEO Noel Quinn in a statement. “Deposits will be protected, with no taxpayer support,” added British Chancellor Jeremy Hunt in a tweet.
The move comes in light of a turbulent weekend for the US financial sector, after California-based SVB was closed down by regulators on Friday. After frantic deliberations on Sunday, US authorities decided to guarantee the bank’s deposits in an effort to stem further contagion.
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