HSBC has scooped up the UK arm of Silicon Valley Bank for £1 ($1.2), just days after its business in the United States collapsed in stunning fashion.
SVB UK would have been placed into insolvency by the Bank of England following the failure of its parent, had a buyer not been found.
In a statement, the Bank of England said it “can confirm that all depositors’ money with SVB UK is safe and secure as a result of this transaction.”
Europe’s biggest bank announced the acquisition early Monday morning, saying the deal would be effective “immediately.”
In a statement, HSBC CEO Noel Quinn said the deal means that “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.”
“This acquisition makes excellent strategic sense for our business in the UK,” he said. “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.”
As of last Friday, SVB UK had loans of approximately £5.5 billion ($6.7 billion) and deposits of around £6.7 billion ($8.1 billion), according to the statement. It also logged a pretax profit of £88 million ($106.5 million) in its last fiscal year ended December.
SVB, a lender best known for providing financing to startups, had faced liquidity concerns in the United States, triggering a huge bank run last week. That ultimately led to its collapse, the second-biggest of a financial institution in US history, on Friday.
US financial regulators reacted swiftly to concerns of contagion over the weekend, announcing that customers of the failed bank would get access to all their money starting Monday.
Authorities have also guaranteed deposits for customers of Signature Bank, a regional US lender shut down by regulators because it had faced financial trouble in recent days.
— This is a developing story and will be updated.