HSBC is coming to rescue the United Kingdom-based branch of the collapsed Silicon Valley Bank with a new acquisition.
HSBC officially announced on March 13 that its subsidiary, HSBC UK Bank, is acquiring Silicon Valley Bank UK for 1 British pound ($1.21).
As of March 10, 2023, SVB UK had loans of around 5.5 billion pounds ($6.7 billion) and deposits of around 6.7 billion pounds ($8.1 billion), HSBC said in the announcement.
For the financial year ending Dec. 31, 2022, SVB UK recorded a profit before tax of 88 million pounds ($107 million). SVB UK’s tangible equity is expected to be around 1.4 billion pounds ($1.7 billion).
Final calculation of the gain arising from the acquisition will be provided in due course,” HSBC wrote, adding that the assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The company added that the acquisition would be funded from existing resources and would be completed immediately.
According to HSBC Group CEO Noel Quinn, the acquisition makes excellent strategic sense for HSBC’s business in the United Kingdom, strengthens its commercial banking franchise, and enhances its ability to serve innovative and fast-growing firms.
