Silicon Valley Bank UK arm acquired by HSBC for 1 pound

Global banking giant HSBC is looking to rescue the UK-based branch of bankrupt Silicon Valley Bank with a new acquisition.

HSBC formally announced on March 13 that its subsidiary HSBC UK Bank will acquire Silicon Valley Bank UK (SVB UK) for £1 ($1.21).

As of 10 March 2023, SVB UK had around £5.5 billion ($6.7 billion) in loans and around £6.7 billion ($8.1 billion) in deposits, HSBC said in a statement.

For the financial year ending 31 December 2022, SVB UK posted a profit before tax of £88m ($107m). SVB UK’s tangible capital is expected to be around £1.4 billion ($1.7 billion).

“A final calculation of the profits arising from the acquisition will be provided in due course,” HSBC wrote, adding that the assets and liabilities of SVB UK’s parent company would be excluded from the transaction. It added that it will be funded by the resources of , and will be completed soon.

According to HSBC Group CEO Noel Quinn, the acquisition has “great strategic implications” for HSBC’s business in the UK, strengthening its commercial banking franchise and serving innovative and fast-growing companies. Strengthen our ability to provide

“We look forward to welcoming SVB UK customers to HSBC and helping them grow in the UK and around the world,” said Quinn, adding:

“SVB UK customers can safely continue banking as usual, knowing that their deposits are backed by HSBC’s strength, safety and security.”

The news sparked panic in the crypto market as US authorities ordered the SVB to cease operations on March 10 and several major crypto firms such as Circle and Coinbase had significant exposure to banks. Brought after provoking.

Related: USDC’s depeg, SVB collapse leaves crypto whales with huge losses

Circle, the issuer of USD Coin (USDC), the second largest stablecoin by market value, is unable to withdraw $3.3 billion of its $40 billion reserves due to the SVB collapse. Coinbase held approximately $240 million in corporate funds in Signature and plans to fully recover that amount. Paxos, the issuer of stablecoins like Pax Dollar (USDP) and the troubled Binance USD (BUSD) stablecoin, where he had $250 million in Signature. It said the amount would be covered by private insurance.