HSBC buys failed lender Silicon Valley Bank UK following government crisis talks after British tech firms were left on the brink by US bank collapse
- Customers of SVB UK will be able to access their deposits as normal from today
- California-based parent company imploded and US regulators seized its assets
The UK arm of collapsed US lender Silicon Valley Bank has been bought by HSBC after the Government and Bank of England stepped in to “facilitate” a private sale.
Chancellor Jeremy Hunt confirmed this morning that all customer deposits have been protected under the deal, with no taxpayer cash involved.
He added that customers of SVB UK will be able to access their deposits and banking services as normal from today.
Mr Hunt also said that the transaction was facilitated by the Bank of England in consultation with the Treasury, using powers granted by the Banking Act 2009.
California-based parent company Silicon Valley Bank imploded and had its assets seized by US regulators on Friday – the largest failure of a bank since the 2008 financial crisis.
Chancellor Jeremy Hunt (pictured jogging near Downing Street this morning) has revealed that Silicon Valley Bank UK had been sold to HSBC
The US government moved to stop a potential banking crisis after the failure, with all deposits protected, amid fears that the factors that caused it to fail could spread.
The Bank of England subsequently ordered its UK subsidiary into insolvency from last night.
This morning, Mr Hunt said: ‘The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.
‘I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
California-based parent company Silicon Valley Bank imploded and had its assets seized by US regulators on Friday – the largest failure of a bank since the 2008 financial crisis
‘Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this 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.
‘HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.’
All deposits are ‘safe and secure’ following the sale of Silicon Valley Bank UK to HSBC, the Bank of England (BofE) said.
In a statement, the BofE said: ‘The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC). HSBC is authorised and supervised by the PRA and the FCA.
‘This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.
‘The Bank and HMT can confirm that all depositors’ money with SVBUK is safe and secure as a result of this transaction. SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.
‘Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal. SVBUK staff remain employed by SVBUK, and SVBUK continues to be a PRA/FCA authorised bank.’
HSBC chief executive Noel Quinn said: ‘This acquisition makes excellent strategic sense for our business in the UK.’