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HSBC swoops in as white knight for Silicon Valley Bank, buys collapsed lender’s UK unit for £1
- “This acquisition makes excellent strategic sense for our business in the UK,” HSBC’s CEO Noel Quinn said in a statement
- The deal, which has already been completed, excluded assets and liabilities of SVB, leaving HSBC to finance the acquired entity from existing resources
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HSBC has swooped in as a white knight to rescue the UK subsidiary of the failed lender Silicon Valley Bank (SVB), offering support in a collapse that has roiled both the financial and tech worlds.
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The ring-fenced British business of HSBC will pay a nominal £1 (US$1.21) for the UK unit of SVB, following efforts by the Bank of England and the British government all weekend to find a buyer.
The Bank of England placed SVB’s business into insolvency on Friday hours after its US parent was closed by American regulators in the second biggest bank failure in US history and the biggest since Washington Mutual failed during the global financial crisis in 2008.
“This acquisition makes excellent strategic sense for our business in the UK,” HSBC’s chief executive Noel Quinn said in a stock exchange announcement. “It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally.”
SVB UK’s tangible equity is estimated at around £1.4 billion, HSBC said. The deal, which has already been completed, excluded assets and liabilities of SVB, leaving HSBC to finance the acquired entity from existing resources.
Government officials raced to find a buyer for the UK arm, fearing a potential crisis among British technology firms if they were unable to access capital and pay their staff following the bank’s closure.
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