Global banking firm HSBC is acquiring the UK branch of the recently collapsed Silicon Valley Bank, SVB UK.
The company announced on 13 March that its subsidiary, HSBC UK Bank, would be acquiring SVB UK for £1.
HSBC said in its announcement that SVB UK had outstanding loans of approximately £5.5 billion and held deposits of £6.7 billion as recently as 10 March.
In the financial year ending 31 December 2022, SVB UK recorded profits of £88 million before tax, with an expected tangible equity of around £1.4 billion.
HSBC said: “Final calculation of the gain arising from the acquisition will be provided in due course. The assets and liabilities of the parent companies of SVB UK are excluded from the transaction.”
It went on to say that the acquisition would be funded from existing resources and completed immediately.
Noel Quinn, CEO of HSBC Group, 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,” he continued:
“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.”
The acquisition of SVB UK comes days after California’s financial regulator ordered the bank to shut down operations in the United States on 10 March.
The news sent panic throughout the crypto sector, especially for major companies like Coinbase and Circle, both of which have significant exposure to the bank.
USDC stablecoin issuer Circle has been unable to withdraw $3.3 billion of its $40 billion in reserves following the collapse.
As of the time of publication, these reserves are expected to be made fully available with the Monday morning opening of US banks.
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