British multinational universal bank HSBC Holdings Plc has announced on Monday that it has acquired the Silicon Valley Bank UK Limited for £1.
This development comes after it was revealed that commercial banking company, Silicon Valley on Friday morning collapsed after a stunning 48 hours in which its capital crisis set off fears of a meltdown across the banking industry.
In a statement released on Monday, HSBC said that the acquisition will strengthen its operations in the UK and that the transaction “completes immediately,” adding that “the acquisition will be funded from existing resources.”
In reaction to the acquisition, 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.
“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. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.”
In statement, it was revealed that “as of 10 March 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88m. SVB UK’s tangible equity is expected to be around £1.4bn.
“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.”
HSBC added that it would update shareholders on the acquisition at its 1Q 2023 results on May 2, 2023.
