HSBC has today announced that they have bought the UK arm of Silicon Valley Bank for a symbolic one pound, rescuing a key lender for technology start-ups in Britain.
The deal, which sees one of the world鈥檚 biggest banks, with $2.9 trillion of assets, take the doomed British arm of the tech lender under its wing, brought to an end听frantic weekend talks between the government, regulators, and prospective buyers.
The rescue of SVB UK was welcomed by British government ministers, regulators and technology start-ups, who said customers would be able to bank as normal.
听
A big bail out
听
鈥淗SBC is Europe鈥檚 largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them,鈥� Britain鈥檚 finance minister Jeremy Hunt said.
鈥淲e were faced with a situation where we could have seen some of our most important companies 鈥� our most strategic companies 鈥� wiped out, and that would have been extremely dangerous,鈥� Hunt told reporters.
Asked about HSBC鈥檚 white-knight role, Hunt said his priority had been to avoid using British taxpayers鈥� money. One pound is worth $1.21.
The Bank of England听said it had organised the sale听to underpin confidence in the financial system and minimise any fallout for British technology firms.
听
More from News
- From Workouts To Managing Jetlag: The British Tech Scale-Up That Just Hit One Million Users Globally Appoints New CEO
- Hackers Tricked Instagram鈥檚 AI To Leak Your Log In Details 鈥� How Can Users Stay Protected?
- New Research Reveals The UK鈥檚 Top 10 鈥淔uture-Ready鈥� Cities
- New Research Shows How Elections Are Impacting The Job Market 鈥� Here鈥檚 How
- Is London Becoming The World鈥檚 Next AI Capital?
- Google鈥檚 AI Can鈥檛 Even Spell 鈥淕oogle鈥� 鈥� So Why Is It Replacing Search?
- Will AI Labels Actually Save YouTube From AI Slop?
- The Rise Of 鈥淣ew Brand鈥� Cybercrime Groups And The Business Of Ransomware
听
It said deposits at the bank were safe as a result of the sale, and that the wider banking system was safe.
听
A billion dollar balance sheet
听
鈥淥n the face of it appears a good deal,鈥� Richard Marwood, senior fund manager and HSBC investor at Royal London Asset Management, said. 鈥淪VB lacked liquidity and depositor confidence 鈥� HSBC has both of those in spades.鈥�
鈥淭his acquisition makes excellent strategic sense for our business in the UK,鈥� HSBC CEO Noel Quinn said in a statement.
SVB UK has loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds, HSBC said, adding the takeover completes immediately.
The Bank of England said SVB UK had a total balance sheet size of around 8.8 billion pounds.
Unlike the United States, Britain has not announced broader liquidity measures for the banking system.
听
Startups seeking reassurance
听
Dozens of listed British companies issued statements on Monday about their exposure to SVB UK, seeking to reassure investors 鈥� or in some cases warn them 鈥� just as news of the rescue deal was announced.
Industry bodies representing start-ups welcomed the takeover deal for shielding them from financial turmoil, including the biotech sector where about 40% of companies banked with SVB UK.
鈥淸We] knew that this was absolutely crucial for our sector and companies would be going down this morning if there wasn鈥檛 a solution,鈥� Steve Bates, chief executive of Britain鈥檚 BioIndustry Association told Reuters.
Other potential buyers for SVB UK had included Bank of London, which said on Sunday it had submitted a formal proposal. SoftBank-owned lender OakNorth Bank also considered bidding, a person with knowledge of the talks told Reuters.
Source:
