HSBC Holdings Plc (HSBA) has announced that its UK subsidiary, HSBC UK Bank, will acquire Silicon Valley Bank UK for £1 ($1.21). The deal, described as a strategic acquisition to strengthen HSBC’s banking franchise in the UK, will further restrict the economic fallout resulting from the bank’s collapse. 

According to a filing released today, the SVB UK, as of March 10, had deposits of around $8.1 billion, while its loans stood at $6.6 billion. The total profits from the acquisition will be announced “in due course”.

HSBC Group CEO, Noel Quinn, said, “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 sale of SVB UK was facilitated by the UK government and the Bank of England, as they sought to wind up failing lenders without adversely affecting taxpayers and the economy. Finance minister Jeremy Hunt took to Twitter to announce the deal this morning. “Deposits will be protected, with no taxpayer support,” he maintained. 

On Friday, when news broke that Silicon Valley Bank had been closed by American regulators, the Bank of England announced its intention to put the bank’s UK unit into insolvency. The statement notably hinted at SVB UK’s limited presence in the country.

As of today, however, American SVB depositors—insured or not—can access their complete monies, courtesy of the US government. 

Since its entrance into the UK market in 2004, Silicon Valley Bank has played a significant role in the growth of the country’s innovation economy. It has served as a financial partner to several institutional investors and fast-growing, innovative startups, including Snyk, Wise, and Atomico.

“We [said we] would look after our tech sector, and we have worked urgently to deliver that promise,” Hunt said.

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