On March 13, HSBC Holdings Plc stated that Silicon Valley Bank UK Limited (SVB UK), a UK ring-fenced subsidiary, would be purchased for £1 by HSBC UK Bank plc. As of March 10, 2023, SVB UK has deposits of about £6.7 billion and loans of about £5.5 billion.
The estimated tangible equity for SVB UK is £1.4 billion
SVB UK reported a profit before tax for the fiscal year that ended on December 31, 2022, of £88 million. The estimated tangible equity for SVB UK is £1.4 billion. In due course, the precise calculation of the acquisition’s gain will be made available. The parent firms of SVB UK are not included in the transaction’s assets or liabilities. The deal is finished right away. According to a statement from HSBC, existing funds would be used to pay for the transaction.
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.”
Bank of England (BoE) said that it had supported the transaction and that customer deposits would be safeguarded
On May 2, HSBC will provide investors with an update on the purchase in its 1Q 2023 results.
In a separate statement, the Bank of England (BoE) said that it had supported the transaction and that customer deposits would be safeguarded.
Potential bidders allegedly held conference calls with the BoE all night, according to people briefed on the negotiations.
At six in the morning, Noel Quinn, the bank’s chief executive, had taken the lead as the top white-knight bidder for SVB UK.
One person briefed on the haggling over the future of SVB UK said it was a “fully competitive” process with multiple parties interested in taking over the stricken bank. Sunak, in California for a defense summit with leaders of the US and Australia, was said to have been “very hands-on” overnight.
The government spent the weekend racing to try to sell SVB UK and put together a backup plan to support companies that have deposits trapped in the lender. US regulators on Sunday evening said that SVB’s American depositors would have access to all of their money on Monday.
