:strip_icc()/i.s3.glbimg.com/v1/AUTH_59edd422c0c84a879bd37670ae4f538a/internal_photos/bs/2023/K/y/n1KwAURZy0AQmAVvzhxA/bbc-svb.jpg "HSBC buys UK subsidiary of Silicon Valley Bank for £1 | Economy")
HSBC on Monday (13) announced the purchase of the British subsidiary of Silicon Valley Bank. The operation quoted only 1 pound.
According to HSBC Group CEO Noel Quinn, the aim is to strengthen the HSBC banking franchise in the UK. Customers of the former bank will continue to conduct banking transactions as usual, but with the security mechanisms of one of the largest financial institutions in the world.
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“This acquisition makes excellent strategic sense for our UK business. It strengthens our commercial banking franchise and increases our ability to serve innovative and fast-growing companies, including in the technology and life sciences sectors, in the UK and internationally.”
British Chancellor Jeremy Hunt said the operation was being carried out “without the support of the taxpayer”.
“HSBC is the largest bank in Europe and clients of SVB Bank in the UK should take comfort in its strength,” he added.
“A solution was found in such a short time,” the minister celebrated, after a weekend of meetings and negotiations, for example, with the technology sector, since many of these companies were SVB clients and feared they would run out of cash. Silicon Valley bank collapsed last Friday (10).
As of Friday, SVB UK had loans of about 5.5 billion pounds ($6.65 billion) and deposits of about 6.7 billion pounds (about $8 billion), according to HSBC, which said “the assets and liabilities of SVB UK’s parent companies are excluded.” out of the bargain
Silicon Valley bank collapse
On Friday, US authorities announced that they had shut down the activities of Silicon Valley Bank (SVB), a bank working to support the technology sector. The foundation was created in 1983 and has provided credit to many startups.
A Silicon Valley bank had about $209 billion in assets by the end of 2022, making it the 16th largest bank in the US, according to the Federal Reserve – the US central bank.
US media reported that one of the factors that led to the bankruptcy of SVB was the rise in the US interest rate, which moved from 0.25% in 2020 to 4.75% in February of this year.
The bank mainly served start-ups and financiers. As the tech sector has begun to slow down in recent months, with interest rate hikes continuing to curb inflation, companies served by SVB have begun withdrawing funds faster than expected.
According to the “Wall Street Journal”, this was the second largest bank failure in US history. In addition, the institution is the largest failed institution since the collapse of the US financial system in 2008, which at that time led to a global crisis.
Charlotte Whitmore is a contributor at Mediarunsearch.co.uk, covering a broad range of topics including news, politics, business, technology, sport, entertainment, and lifestyle. She focuses on delivering clear, balanced reporting and practical information that helps readers stay informed about current events and emerging developments. Her work highlights stories that matter to everyday audiences, with an emphasis on accuracy, relevance, and accessible journalism that keeps readers connected to the issues shaping the UK and beyond.