HSBC announced on Monday that it will be acquiring the British branch of Silicon Valley Bank, which has been struggling financially, for a mere 1 pound. This acquisition will aid technology start-ups in Britain as Silicon Valley Bank was a key lender for them.
HSBC CEO Noel Quinn said in a statement that this acquisition is strategically beneficial for their UK business. The decision to acquire the UK subsidiary was made after the collapse of Silicon Valley Bank’s parent company, a tech start-up lender, and the U.S. government’s efforts to stabilize deposits and prevent any potential ripple effects.
Following the announcement, the Bank of England declared that the banking system in Britain is stable. They clarified that the actions taken and the resolution of the U.S. parent bank of SVB UK will not have any direct or significant impact on other banks in the UK. They further emphasized that the overall banking system in the UK is secure, financially strong, and well-capitalized.
It should be noted that SVB UK operates independently from its U.S. parent company, and HSBC’s acquisition of SVB UK excludes the assets and liabilities of the parent company.
