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HSBC acquires Silicon Valley Bank’s UK operations for £1/share
Hongkong and Shanghai Banking Corporation Limited (HSBC) has acquired Silicon Valley Bank’s UK operations after the U.S. parent company declared bankruptcy.
HSBC, a small business lender OakNorth, and a consortium of private equity firms led by Bank of London, a clearing bank, had competed for the acquisition of Silicon Valley Bank.
However, after a private meeting between HSBC Chief Executive, Noel Quinn, the UK government, and the Bank of England, Silicon Valley Bank’s UK operations were handed to HSBC for £1 per share on Monday.
Ripples Nigeria previously reported that Silicon Valley Bank declared bankruptcy last week, making it the second-largest bank failure in the United States since its financial crisis in 2008.
The insolvency of Silicon Valley Bank has led to fear of another financial crisis which might spread to the global financial market.
READ ALSO:HSBC to save $5b by sacking 25,000 workers globally
In a bid to forestall the impact of Silicon Valley Bank’s collapse on its financial and tech sector, considering the many tech startups that depend on the firm, the UK government secured a deal for the firm instead of taking over its assets.
UK chancellor, Jeremy Hunt, wrote on Twitter on Monday that the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.
Hunt tweeted, “Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”
Speaking on the acquisition of Silicon Valley Bank, which holds £6.7 billion in deposits, HSBC’s Quinn said, “This acquisition makes excellent strategic sense for our business in the UK.
“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.”
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