March 14, 2023
By Sharan Kaur Phillora
In the biggest development amid the furor triggered due to the collapse of California-based Silicon Valley Bank (SVB), HSBC announced that it had acquired the UK arm of the SVB. HSBC said it had acquired the UK subsidiary of SVB for 1 pound.
Here’s what we know:
The sale, overseen by the Bank of England and the Treasury, comes after SVB collapsed Friday, sparking panic in Britain over its key customers in the technology and life science sectors. “Silicon Valley Bank (UK) Ltd has today been sold to HSBC,” the government said in a statement after frantic talks reportedly led by Prime Minister Rishi Sunak.
As of March 10, 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending December 31, 2022, SVB UK recorded a profit before tax of £88m. SVB UK’s tangible equity is expected to be around £1.4bn, read the statement.
The final calculation of the gain arising from the acquisition will be provided in due course. The assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The transaction completes immediately. The acquisition will be funded from existing resources, it read.
HSBC will update shareholders on the acquisition at its 1Q 2023 results on 2 May 2023, the HSBC said. “This acquisition makes excellent strategic sense for our business in the UK,” said HSBC chief executive Noel Quinn.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.