In historic lastminute deal, HSBC acquires Silicon Valley Bank UK, says all depositors money is safe
- The wider UK banking system remains safe, sound, and well capitalised.Noel Quinn, HSBC Group CEO, welcomed Silicon Valley Bank UK customers in a statement, saying they could continue to bank as usual:This acquisition makes excellent strategic sense for our business in the UK.
- Final calculation of the gain arising from the acquisition will be provided in due course.The Bank of England said all depositors’ money with SVB UK is safe, with the deal ensuring the continuity of banking services.It means SVB UK will not now be put into insolvency.U.K.
- The quick turnaround of the deal will be seen as a signal of the government’s support of tech, and overall confidence in the financial system.HSBC said the transaction “completes immediately.” The acquisition will be funded from existing resources.
- Given the emergence of a credible purchaser for SVBUK the Bank has determined that using its resolution powers for stabilising failing banks is appropriate.No other UK banks are directly materially affected by these actions, or by the resolution of SVBUK’s US parent bank.
- And since a bank has stepped in to rescue another bank, it also reduces the so-called “moral hazard” risk where failed banks and depositors assume the exit is to get bailed out by the government.More to come.
- We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.Dom Hallas, executive director of Coadec, the U.K. nonprofit that lobbies government on behalf of tech startups, said: “The Government deserves huge credit.
HSBC UK is acquiring Silicon Valley Bank UK for a symbolic 1, after a tense weekend of frantic negotiations by the UK government, regulators and a suite of other potential suitors.The deal is a ma [+3791 chars]