Sale of Silicon Valley Bank UK to HSBC

The UK arm of collapsed US lender Silicon Valley Bank was bought by HSBC after the government and Bank of England intervened to ‘facilitate’ a private sale.

Chancellor Jeremy Hunt confirmed that all customer deposits are protected under the deal, with no taxpayers’ money involved.

It comes after the US government sought to halt a potential banking crisis following the historic failure of Silicon Valley Bank, with all deposits protected, and fears the factors behind the failure of the Santa Clara, California, resident bank, could spread.

Mr Hunt said: “Today the Government and Bank of England facilitated a private sale of Silicon Valley Bank UK. This ensures that customer deposits are protected and can be transferred as usual without taxpayer assistance.

“I am pleased that we have come to a solution in such a short time.

“HSBC is Europe’s largest bank and SVB UK clients should feel reassured by the strength and security they bring with them.”

HSBC and the Treasury said customers of SVB UK will be able to access their deposits and banking services as usual after the sale to HSBC for a notional amount of £1.

There were growing fears that the collapse of SVB – the second largest bank failure in history – may have also sent shockwaves through the tech and life sciences sectors in the UK, as many of these firms are clients of the bank’s UK operations.

SVB UK had around £6.7 billion in deposits and around £5.5 billion in loans as of Friday last week, while its balance sheet stood at £8.8 billion, according to the Bank of England.

But the bank said that “the extent of the deterioration in liquidity and confidence means that the bank and the PRA believe the position could not be restored.”

“Therefore, the Bank of England, in consultation with HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), has decided to use resolution powers to stabilize failing banks that were called in after the financial crisis,” it added .

The bank stressed that all services at SVB UK will continue as usual after the transaction, with all staff remaining employed at the bank.

“Customers can continue to contact SVB UK through the usual channels and borrowers should make all loan repayments to SVB UK as usual,” it said.

The broader UK banking system “remains safe, sound and well capitalised,” the bank added.

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