HSBC has bought the embattled UK arm of Silicon Valley Bank (SVB UK) for as little as £1, securing the deposits of more than 3,000 customers worth £6.7 billion. According to a report by Sky News, this was confirmed by the Bank of England, which had been preparing to bring the bank into an insolvency process.
The move, said the national bank, means the depositors’ money with SVB UK was safe and secure as a result of the purchase. All SVB UK Services will also continue to operate as normal and customers should not notice any changes.
HSBC, in a statement to Sky News, said it bought SVBUK, which has a balance sheet of £8.8bn - for £1. It said: "This acquisition makes excellent strategic sense for our business in the UK.
Noel Quinn, HSBC group chief executive said: "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.
A statement from the Treasury also highlighted that no taxpayer money is involved in the sale. Chancellor Jeremy Hunt said: "Making use of post-crisis banking reforms, which introduced powers to safely manage the failure of banks, this sale has protected both the customers of SVB UK and taxpayers.
"The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
"HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them." HSBC, headquartered in London, is the largest bank in Europe and is one of the world’s largest banking and financial services institutions, serving 39 million customers globally.