In this file photo taken on March 10, 2023, property manager representative passes a sign at Silicon Valley Bank’s headquarters in Santa Clara, California. (Photo: AFP)
The UK arm of failed US lender Silicon Valley Bank has been sold to HSBC for a nominal £1 ($1.2) in a rescue deal, the government and HSBC announced Monday.
The deal, overseen by the Bank of England and the Treasury, comes after SVB collapsed Friday sparking panic in Britain over its customers in the technology and life science sectors.
"Silicon Valley Bank (UK) Ltd has today been sold to HSBC," said a Treasury statement after urgent talks over the weekend.
"This transaction has been facilitated by the Bank of England, in consultation with the Treasury, using powers granted by the Banking Act 2009."
Finance minister Jeremy Hunt added that no government cash was involved, while all customer deposits have been safeguarded.
"This (deal) 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," added Hunt.
HSBC has agreed to pay just £1 for the business, the bank giant added in a separate statement.
The Asia-focused lender added that SVB UK had loans of about £5.5 billion and deposits of around £6.7 billion.
"This acquisition makes excellent strategic sense for our business in the UK," said HSBC chief executive Noel Quinn.
"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."
He added that SVB UK's 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 customers, mainly from the tech sector, made massive withdrawals, and after its latest attempt to raise new 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.