On March 13, HSBC Holdings Plc revealed that its UK ring-fenced subsidiary, HSBC UK Bank plc, would purchase Silicon Valley Bank UK Limited (SVB UK) for a sum of £1. SVB UK’s loan portfolio was approximately £5.5 billion and its deposits were around £6.7 billion as of March 10, 2023.
SVB UK reported a pre-tax profit of £88 million for the fiscal year ending on December 31, 2022. Its tangible equity is anticipated to be approximately £1.4 billion. The precise determination of the profit resulting from the acquisition will be disclosed at a later time. The transaction solely encompasses SVB UK’s assets and liabilities, excluding those of its parent companies. The acquisition has already been finalized, and HSBC confirmed that it would be financed using its existing resources in the statement.
Furthermore, 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.
HSBC Group’s CEO, Noel Quinn, expressed his excitement about the acquisition, emphasizing that HSBC is thrilled to welcome SVB UK’s customers to its fold and to support their growth within the UK and globally. Additionally, SVB UK customers can rest assured that their deposits are backed by the strength, security, and stability of HSBC. HSBC is also pleased to welcome SVB UK’s colleagues and is eager to begin working with them.
Moreover, to ensure the continuity of business operations at SVB UK, HSBC Holdings Plc has announced plans to provide £2 billion ($2.4 billion) of liquidity to the division. In a call to London tech investors on Monday, HSBC Group CEO Noel Quinn and HSBC UK Head Ian Stuart confirmed the bank’s commitment to investing billions of pounds.
Meanwhile, Reuters has reported that potential bidders for SVB Bank are beginning to lose interest in the bidding process. In the meantime, on Sunday night, U.S. regulators stepped in to provide support for the bank. Additionally, sources have disclosed that J.P. Morgan and PNC are in discussions to purchase SVB Financial Group, but the agreement would exclude the commercial bank that is presently controlled by the U.S. government.
