HSBC acquires UK arm of failed Silicon Valley Bank
STORY: HSBC is stepping in to help calm nerves over failed U.S. lender Silicon Valley Bank.
The banking giant will acquire the UK operations of SVB for a token one pound - or just over a dollar.
The move comes after U.S. authorities rushed to shore up deposits and stem any wider fallout from the collapse of the bank.
They’ve guaranteed that customers will have access to their deposits, and set up a new facility to give banks access to emergency funds.
On Monday (March 13) HSBC chief executive Noel Quinn said acquiring SVB UK made strategic sense.
The Bank of England said the UK banking system was safe, sound and well capitalised.
It said no other lenders in the country were materially affected.
The deal brings to an end a frantic weekend of talks between government, regulators and prospective buyers.
On Monday, UK finance minister Jeremy Hunt said ministers had to act to save the country's tech sector:
"We were faced with a situation where we could have seen some of our most important companies, our most strategic companies wiped out, and that would have been extremely dangerous. We have built over the last decade the third largest tech economy in the world, after only China and the United States. So it's very important us as a country, this sector thrives, and that's why the prime minister, I, the Bank of England were all rolling our sleeves up over the weekend, to make sure we had a solution."
SVB UK had loans of around $6.6 billion as of late last week, and HSBC says the takeover completes immediately.
However, the collapse of the U.S. lender has raised jitters over the health of the whole sector.
On Monday morning European banking stocks were down over 3% in early trade.
HSBC shares fell by around the same amount.