Government and BOE facilitate sale of HSBC Silicon Valley Bank (UK)
The United Kingdom (UK) subsidiary of fallen United States (US)-based Silicon Valley Bank (SVB) has been sold, as of today (March 13), to the Hongkong and Shanghai Banking Corporation (HSBC).
HSBC, headquartered in London, is the largest bank in Europe and is one of the world’s largest banking and financial services institutions, serving 39 million customers globally. SVB, favoured by venture capital companies, collapsed on Friday (March 10) with customers looking to get their money out while the US government has made it clear that there will be no bailout.
Customers can access their deposits
SVB has US$210 billion in assets and is the 16th largest bank in America and its fall on Friday led to a precipitous fall in the share price of other major banks. Customers of SVB UK will be able to access their deposits and banking services as normal from today.
The sale of the bank to HSBC was facilitated by the Bank of England, in consultation with the UK Treasury, using powers granted by the Banking Act 2009. It has been made patently clear by the authorities that no taxpayer money is involved and customer deposits have been protected.
Making use of post-crisis banking reforms, which introduced powers to safely manage the failure of banks, this sale has protected both the customers of SVB UK and taxpayers. The UK has a world leading tech sector with a dynamic start-up and scale-up ecosystem and the government said it was pleased that a private sector purchaser had been found.
Statement from UK Chancellor
In commenting on the sale of the bank, UK Chancellor Jeremy Hunt issued a statement saying: “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.”
Continuing, he said: “Today the Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; 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. HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”