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HSBC acquires Silicon Valley Bank UK in last-minute deal, says all depositors’ money is safe

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Mike Butcher
·4 min read
First Citizens to acquire Silicon Valley Bank

HSBC UK is acquiring Silicon Valley Bank UK for a symbolic £1. The deal comes after a tense weekend of frantic negotiations by the U.K. government, regulators and a suite of other potential suitors in the wake of the U.K. business, a subsidiary of the troubled U.S. entity, entering insolvency procedures on Friday.

The deal is a massive relief to the U.K. technology sector, which was highly exposed to the collapse of both SVB and its U.K. arm. 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. The bank added in a statement:

As at 10 March 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88 million. SVB UK’s tangible equity is expected to be around £1.4 billion. Final calculation of the gain arising from the acquisition will be provided in due course.

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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. Chancellor Jeremy Hunt said: "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."