HSBC to buy Silicon Valley Bank UK after weekend of crisis talks

HSBC is buying collapsed lender Silicon Valley Bank’s UK arm for £1 in a private sale facilitated by the government and the Bank of England.

The Bank of England announced on Friday that Silicon Valley Bank UK was entering insolvency, following the collapse of its parent company in the United States – the largest failure of a bank since the 2008 financial crisis.

It comes after the US government moved to stop a potential banking crisis after the historic failure of Silicon Valley Bank, with all deposits protected, amid fears that the factors that caused the Santa Clara, California-based bank to fail could spread.

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HSBC has said it had acquired the UK subsidiary of the bank for just £1.

Chancellor Jeremy Hunt confirmed the news in a tweet, saying: “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. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”

The Bank of England has said all deposits are “safe and secure” following the sale.

Their statement added: “The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC). HSBC is authorised and supervised by the PRA and the FCA.”

Mr Hunt added: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.

“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.

“Today the Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.

“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”

Tom Tugendhat, MP for Tonbridge and a former Tory leadership hopeful, tweeted that it represents a “great deal”.

He wrote: “[This is] a great deal for GB tech – avoiding disruption; GB taxpayers – it costs us nothing and backs ideas, jobs and future taxes; and HSBC shareholders – it opens an important sector of the economy to them. Well done @hmtreasury.”

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