HSBC acquires UK arm of Silicon Valley Bank for £1

The deal was facilitated by the Bank of England – in consultation with regulators the Prudential Regulation Authority and the Financial Conduct Authority, alongside the Treasury – with the deal protecting customer deposits at the bank.  

It comes after last Friday (10 March) SVBUK’s US-based parent company – Silicon Valley Bank – collapsed, with it being the largest US bank failure since the 2008 financial crisis. When this announcement had been made, the Bank of England said it would apply for SVBUK to be placed into a Bank Insolvency Procedure, however this will now not take place.  

In a statement, the UK’s central bank said: “Today’s announcement supersedes the Bank’s 10 March statement that, absent any meaningful further information, it intended to apply to the court to place SVBUK into a Bank Insolvency Procedure.  

“Given the emergence of a credible purchaser for SVBUK the Bank has determined that using its resolution powers for stabilising failing banks is appropriate. No other UK banks are directly materially affected by these actions, or by the resolution of SVBUK’s US parent bank.”  

Silicon Valley Bank specialised in lending to technology companies, and while its UK branch was small with just over 3,000 business customers, it would have presented a risk for the country’s tech sector.  

In a statement, chancellor Jeremy Hunt said: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.  

“Today (13 March) the government and the Bank of England have facilitated a private sale of SVBUK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.”