After a weekend of frenetic discussions by UK officials, Silicon Valley Bank UK Ltd (SVB UK) will be acquired by HSBC UK Bank plc for one pound.
Details on The Silicon Valley Bank UK Ltd was acquired by HSBC Bank
HSBC claims that the transaction “completes instantly” in a statement. The purchase will be paid for with already available funds, according to the Guardian.
SVB UK had deposits of about 6.7 billion pounds and loans of about 5.5 billion pounds as of 10 March 2023. SVB UK reported a profit before tax for the fiscal year that ended on December 31, 2022, of 88 million pounds. The tangible equity of SVB UK is anticipated to be in the range of 1.4 billion pounds. The acquisition’s gain will be calculated in full in due time, according to HSBC.
According to the Bank of England, the sale to HSBC was made in order to “stabilise SVBUK”.
The pact, according to the UK central bank, will maintain the continuity of banking services, minimise damage to the UK technology sector, and promote trust in the financial system, according to a story in the Guardian.
Significantly, the Bank of England and HM Treasury can attest that this transaction has left all depositors’ money with SVBUK safe and secure.
That would come as a huge comfort to tech organisations, who reportedly worried that losing their money at SVB UK would pose a “existential threat” to their operations.
According to the BoE, the agreement with HSBC prevents SVB UK from going bankrupt at this time.
“SVBUK’s business will be conducted as usual by SVBUK,” it states. Customers shouldn’t notice any changes since all services will continue to run as usual.