The logo of Silicon Valley Bank (SVB) can be seen in the rain-covered window.
Justin Sullivan | Getty Images News | Getty Images
LONDON – HSBC announced on Monday a deal to buy the UK subsidiary of US tech startup lender Silicon Valley Bank, which collapsed on Friday.
HSBC has confirmed that its UK ring-fenced subsidiary, HSBC UK Bank, has agreed to take over SVB UK for £1 ($1.21). The assets and liabilities of the parent company SVB UK are excluded from the transaction.
The acquisition “strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing companies, including the technology and life sciences sectors, in the UK and internationally ,” said HSBC Group CEO Noel Quinn.
The sale, facilitated by the Bank of England in consultation with the UK Treasury, will protect the deposits of SVB UK clients, the Treasury said in a statement.
British Finance Minister Jeremy Hunt emphasized that the agreement “ensures that customer deposits are protected and can bank as usual, without taxpayer support.”
“The UK technology sector is truly world-leading and vital to the British economy, supporting hundreds of thousands of jobs,” he added.
Hunt said on Sunday that the UK administration and the Bank of England were working to “avoid or minimize” the potential damage resulting from SVB’s UK branch.
Similarly, US regulators on Sunday approved plans to backstop depositors and financial institutions linked to US parent company SVB.
A host of potential buyers have submitted proposals to buy SVB UK since Friday’s failure of its US parent company, amid widespread concern over the immediate future of many British technology startups. and life.
The Bank of London said a consortium of private equity firms led by it had also submitted a formal proposal to the UK Treasury and the Bank of England’s Prudential Regulation Authority.
Bank of London CEO Anthony Watson said SVB “will not be allowed to fail because of the vital community it serves.”
“This is a unique opportunity to ensure the UK has a more diverse banking sector, while allowing SVB to continue to service the UK client base. It is very disappointing for this opportunity to lead to further consolidation of power of the big banks.”
The Bank of England confirmed that no other UK banks were “directly affected by these actions, or by the resolution of SVBUK’s US parent bank,” adding that the wider British banking system remains “safe, sound and sound capital.”
