has bought the U.K. division of Silicon Valley Bank
for £1 in a deal thrashed out over the weekend by the U.K. Treasury, the Bank of England and Europe’s biggest bank by deposits. The rescue was arranged after U.S. parent group Silicon Valley Bank was taken over by regulators on Friday, the second biggest bank failure in U.S. history. The move followed a $42 billion run on the tech-focused lender after depositors were spooked by SVB’s losses on its bond holdings.
“This transaction has been facilitated by the Bank of England, in consultation with the Treasury, using powers granted by the Banking Act 2009. No taxpayer money is involved, and customer deposits have been protected,” said the Treasury in a statement. HSBC’s capture of SVB U.K. came in competition with a Middle Eastern buyer, according to the Financial Times, and bids from British banks OakNorth and the Bank of London. Noel Quinn, HSBC Group CEO, 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 U.K. and internationally”. HSBC said that SVB U.K. had loans of around £5.5 billion ($6.7 billion) and deposits of around £6.7 billion. For the financial year ending 31 December 2022, SVB U.K. recorded a profit before tax of £88 million. SVB UK’s tangible equity is expected to be around £1.4 billion. “Final calculation of the gain arising from the acquisition will be provided in due course. The assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The transaction completes immediately. The acquisition will be funded from existing resourc …