Global banking major HSBC announced on Monday that it is acquiring the UK arm of the beleaguered Silicon Valley Bank (SVB) for £1. The move was facilitated Government and the Bank of England, as informed by Britain's finance minister Jeremy Hunt.
Regarding the acquisition, HSBC’s chief executive officer Noel Quinn said, “This acquisition makes excellent strategic sense for our business in the UK.” The move will ensure that the customer deposits in SVB’s UK arm will be protected, without any taxpayer support, Hunt said via a Twitter post.
This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC— Jeremy Hunt (@Jeremy_Hunt) March 13, 2023
Deposits will be protected, with no taxpayer support
I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise
Hunt further said, “HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety and security that (it) brings them.”
In the US, authorities have stepped in to rescue customer deposits and prevent further fallout after SVB collapsed last Friday. The failure of the bank, which is widely recognised lender in the tech start-up space, is considered to be biggest banking failure since the 2008 financial crisis.
In the immediate aftermath of SVB’s failure, headwinds in the US banking sector led to the collapse of the New York-based Signature Bank as well. This bank was also closed by regulators on Sunday.
SVB’s failure is considered as a wake-up call for the US banking sector, and the bank collapse may also pose threat to some start-ups based in India, as per reports. Nazara Technologies, an Indian gaming and sports media platform, has already informed regulators that a couple of its step-down subsidiaries have deposits at SVB.