HSBC U.K. has purchased the England-based subsidiary of Silicon Valley Bank, Silicon Valley Bank U.K. for £1.
The deal was facilitated by the Bank of England and the U.K. government, Jeremy Hunt, Chancellor of the Exchequer, said in a tweet on Monday.
"The action has been taken to stabilise SVB U.K., ensuring the continuity of banking services, minimising disruption to the U.K. technology sector, and supporting confidence in the financial system," the Bank of England said in a Monday statement regarding the transaction.
For the financial year ending Dec. 31, SVB U.K. reported a profit before tax of £88 million, according to a statement from HSBC U.K. Its tangible equity is expected to be around £1.4 billion, the statement said. The acquisition will be completed immediately and will be funded from existing resources of HSBC U.K.
This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC
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 promiseAll services will continue to operate as normal, and customers should not notice any changes, the statement said.
At the point of failure, SVB U.K. had a total balance sheet size of approximately £8.8 billion, or $10.6 billion, and a deposit base of approximately £6.7 billion, or $8.1 billion, according to the Bank of England's statement.
"This acquisition makes excellent strategic sense for our business in the U.K. 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," Noel Quinn, chief executive officer of HSBC Group, said.
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