London:
The UK branch of failed US lender Silicon Valley Bank has been sold to HSBC for a paltry £1 ($1.2) in a rescue deal the government and HSBC announced on Monday.
The deal, overseen by the Bank of England and the Treasury, came after SVB collapsed on Friday, sparking panic among its customers in the technology and life sciences sectors in Britain.
“Silicon Valley Bank (UK) Ltd has been sold to HSBC today,” said a Treasury statement following urgent talks over the weekend.
“This transaction has been facilitated by the Bank of England in consultation with the Treasury, using the powers conferred by the Banking Act 2009.”
Finance Minister Jeremy Hunt said no government cash was involved, while all customer deposits are safe.
“It (the deal) ensures that customer deposits are safe and can bank normally without taxpayer support.
“I’m pleased we’ve reached a resolution in such a short amount of time,” Hunt said.
The banking giant said in a separate statement that HSBC had agreed to pay just £1 for the business.
The Asia-focused lender said SVB UK had loans of about 5.5 billion pounds and deposits of about 6.7 billion pounds.
“This acquisition makes excellent strategic sense for our business in the UK,” said Noel Quinn, chief executive of HSBC.
“This strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including the technology and life-sciences sectors, in the UK and internationally.”
He added that SVB UK customers “can continue to bank as usual” and “will be safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC”.
California-based SVB failed after its clients, mainly from the tech sector, pulled out massively, and its latest attempt to raise fresh money proved unsuccessful.
Its demise is not only the largest bank failure since Washington Mutual in 2008, but also the second largest retail bank failure in the US.
(This story has not been edited by NDTV staff and was auto-generated from a syndicated feed.)
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