Silicon Valley Bank’s UK Unit Sold to HSBC Subsidiary for Nearly Nothing

HSBC U.K. Bank, the ring-fenced subsidiary of HSBC Holdings Plc (HSBA), has announced its acquisition of Silicon Valley Bank U.K. (SVB U.K.) for £1 ($1.21), according to a filing.

SVB U.K. had loans worth approximately $6.6 billion and deposits worth around $8.1 billion as of March 10, as per the filing.

This acquisition is expected to provide strategic benefits to HSBC’s commercial banking franchise and enhance its ability to serve innovative and fast-growing companies, particularly in the technology and life-science sectors, in the U.K. and beyond, said Noel Quinn, HSBC Group CEO.

The sale, which was announced on Monday, was facilitated by the U.K. government under “resolution” powers designed to wind-up failing lenders without destabilizing the financial system.

The finance minister Jeremy Hunt tweeted on Monday that the sale would not require taxpayer support and that deposits would be protected. He added that he had worked urgently to safeguard the interests of the country’s tech sector.

Late on Friday night, the Bank of England tweeted that SVB U.K. would be put into insolvency, but that the lender had a limited presence in the country.

To prevent the largest bank failure since 2008 from undermining confidence in the financial system, U.S. regulators said on Sunday that SVB depositors would be made whole and be able to access funds as of Monday.