Silicon Valley Bank (UK) Ltd sold to HSBC
Silicon Valley Bank (UK) Ltd has today been sold to HSBC.
Headquartered in London, HSBC is the largest bank in Europe and one of the world’s largest banking and financial services institutions, serving 39 million customers globally. Customers of SVB UK will be able to access their deposits and banking services as normal from today.
The transaction has been facilitated by the Bank of England in consultation with the Treasury, using powers granted by the Banking Act 2009. No taxpayer money is involved, and customer deposits have been protected.
Making use of post-crisis banking reforms, which introduced powers to safely manage the failure of banks, this sale has protected both the customers of SVB UK and taxpayers.
The UK has a world leading tech sector, with a dynamic start-up and scale-up ecosystem, and the government is pleased that a private sector purchaser has been found.
Silicon Valley Bank, which specialises in lending to technology companies, was shut down by US regulators on Friday in what was the largest failure of a US bank since 2008. In the UK, the bank has more than 3,000 business customers. A number across the region are affected, including Oxford Medical Products.
As at 10 March 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88 million. SVB UK’s tangible equity is expected to be around £1.4 billion. Final calculation of the gain arising from the acquisition will be provided in due course, said HSBC. 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.
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Noel Quinn, HSBC Group CEO, said: “This acquisition makes excellent strategic sense for our business in the UK. 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.
“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.”
Chancellor Jeremy Hunt said: “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.”
Responding to the announcement from Chancellor Jeremy Hunt, British Venture Capital Association Director General Michael Moore said: “The sale of Silicon Valley Bank in the UK to HSBC is welcome news. Confidence should return to markets and the affected businesses with an orderly transition and access to the cash frozen over the weekend. We continue to monitor the situation and will analyse the details as they emerge later.”
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