HSBC acquires Silicon Valley Bank for £1

With a fresh purchase, the global banking titan HSBC Holdings will save the United Kingdom branch of the defunct Silicon Valley Bank.

On March 13, HSBC formally stated that its subsidiary HSBC UK Bank would acquire Silicon Valley Bank UK Ltd for one British pound sterling (GBP) or $1.21.

HSBC said in its release that, as of March 10, 2023, SVB UK had loans of about 5.5 billion pounds ($6.7 billion) and deposits of around 6.7 billion pounds ($8.1 billion).

During the fiscal year ending on December 31, 2022, SVB UK had a pretax profit of 88 million GBP ($107 million). The projected tangible equity of SVB UK is about 1.4 billion GBP ($1.7 billion).

The assets and liabilities of SVB UK’s parent firms are excluded from the deal, according to HSBC. The business claimed that the transaction would be completed soon and financed using current resources.

According to HSBC Group CEO Noel Quinn, the purchase makes “great strategic sense” for HSBC’s business in the United Kingdom, as it strengthens HSBC’s commercial banking franchise and improves our capacity to service creative, fast-growing companies. He added:

“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”

The announcement comes just after U.S. regulators ordered SVB to cease operations on March 10, sparking a panic in crypto markets owing to the exposure of big crypto businesses such as Circle and Coinbase to the bank.