The UK division of the recently defunct Silicon Valley Bank has been bought by HSBC.
In order to safeguard client deposits, the UK government and Bank of England backed the private sale; no public monies were utilized.
Due to Silicon Valley Bank’s bankruptcy and the potential spread of the conditions that caused it to fail, the US government stepped in to stop a potential banking crisis.
HSBC has acquired the UK division of Silicon Valley Bank, according to Chancellor Jeremy Hunt, with assistance from the government and Bank of England in a private transaction that safeguarded all customer deposits without using taxpayer money.
With the increased strength, safety, and security that comes with HSBC being Europe’s largest bank, the acquisition will enable SVB UK customers to access their banking services and deposits as usual.
Concerns that the SVB bankruptcy would have a negative impact on the technology and life sciences sectors have been allayed. The sale was completed for a pittance of £1.
The Bank of England estimates that as of last Friday, SVB UK’s balance sheet was worth £8.8 billion, consisting of roughly £6.7 billion in deposits and £5.5 billion in loans.
Clients can still reach the bank through standard ways, and loan repayments should be made in the same manner as before. The PRA, FCA, and HM Treasury were consulted in order to deploy resolution authorities for stabilizing failing banks after the Bank of England judged that the situation could not be saved due to the severity of the liquidity and confidence decline.
The bank claims that all business operations at SVB UK will continue as usual, and all employees will stay in their current positions.
Clients can reach SVB UK through their regular methods, and borrowers should continue making their regular loan repayments to SVB UK, according to the Bank.
The Bank added that the UK banking sector as a whole continues to be safe, sound, and appropriately capitalized.