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HSBC Holdings Plc on Monday, announced that it has acquired the Silicon Valley Bank UK Limited for £1.
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.”
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.”
The statement also 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.
HSBC added that it would update shareholders on the acquisition at its 1Q 2023 results on May 2, 2023.
Regulators closed SVB Financial Group and its subsidiary Silicon Valley Bank on Friday and seized its deposits in what is the largest US banking failure since the 2008 financial crisis and the second-largest ever.
The beginning of the end for SVB started on Wednesday when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. According to a California regulatory filing, customers withdrew a staggering $42 billion of deposits by the end of Thursday.
