HSBC to buy SVB UK

According to Sky News, HSBC is buying the UK assets of Silicon Valley Bank (SVB), which was the biggest bank failure in the US in a decade. According to Sky News, HSBC is buying SVB’s UK subsidiary for £1. As of March 10, SVB UK had a loan portfolio of £5.5 billion and deposits of around £6.7 billion. HSBC CEO Noel Quinn said, “This acquisition makes excellent strategic sense for our UK business. SVB UK customers can continue to bank as usual, knowing that their deposits are backed by the strength, safety and security of HSBC.” In a separate statement, the Bank of England said that the sale of SVB UK to HSBC was facilitated by the bank. UK Chancellor of the Exchequer Jeremy Hunt also said that SVB UK customers’ deposits would be protected and that no taxpayer money would be spent. SVB UK reported a record pre-tax profit of £88m in 2022. It was the biggest bank failure since the 2008 crisis. California-based SVB’s share price had fallen by more than 60% after it closed out a $21bn bond position with a loss of around $1.8bn and announced a capital increase of over $2bn. The bank’s losses continued after some venture capital investors advised companies to withdraw their money from the bank, and its operations were suspended. The FDIC announced on March 10 that it had put SVB under receivership, which had caused a market crash, and noted that SVB was the first FDIC-insured institution to fail this year. SVB’s failure was one of the biggest bank failures on record in the US since the 2008 global financial crisis. The biggest such failure was experienced by Washington Mutual during the 2008 crisis.