Justin Sullivan
HSBC (HSBC) said Monday its ring-fenced subsidiary HSBC UK Bank will acquire the British unit of failed lender Silicon Valley Bank, owned by SVB Financial (NASDAQ:SIVB), for £1.
The company said the acquisition will be funded from existing resources. Assets and liabilities of the parent companies of SVB UK are excluded from the deal.
“This acquisition 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,” said HSBC (HSBC) CEO Noel Quinn.
The Bank of England confirmed that depositors’ funds with Silicon Valley Bank UK (SVBUK) are safe and SVBUK will continue to operate normally.
“This action has been taken to stabilize SVBUK, ensuring the continuity of banking services, minimizing disruption to the U.K. technology sector and supporting confidence in the financial system,” according to a statement by the central bank.
The deal supersedes the BOE’s announcement on Friday, in which it said it would apply to court to place SVBUK into a bank insolvency procedure. “Given the emergence of a credible purchaser for SVBUK, the Bank determined that using its resolution powers for stabilizing failing banks is appropriate.”
It clarified that no other U.K. banks are materially affected by these actions. “The wider U.K. banking system remains safe, sound, and well capitalized.”
Earlier, PNC and RBC are reportedly not bidding for Silicon Valley Bank.