The Silicon Valley Bank (SVB) logo is seen through a rain-covered window.
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LONDON — HSBC on Monday announced a deal to buy the U.K. subsidiary of the U.S. tech startup lender Silicon Valley Bank, which collapsed on Friday.
HSBC confirmed that its U.K. ring-fenced subsidiary, HSBC UK Bank, had agreed to acquire SVB U.K. for £1 ($1.21). The assets and liabilities of SVB U.K.’s parent company are excluded from the transaction.
The acquisition “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 U.K. and internationally,” said HSBC Group CEO Noel Quinn.
The sale, facilitated by the Bank of England in consultation with the U.K. Treasury, will protect the deposits of SVB U.K. clients, the Treasury said in a statement.
British Finance Minister Jeremy Hunt stressed that the deal “ensures customer deposits are protected and can bank as normal, with no taxpayer support.”
“The U.K.’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs,” he added.
Hunt had on Sunday said that the U.K. administration and the Bank of England were working to “avoid or minimize” potential damage resulting from the U.K. branch of SVB.
In parallel, U.S. regulators on Sunday approved plans to backstop depositors and financial institutions linked with U.S. parent company SVB.
A host of potential buyers had submitted proposals to purchase SVB U.K. since the Friday failure of its U.S. parent company, amid widespread concern over the immediate futures of many British tech and life sciences startups.
The Bank of London said that a consortium of private equity firms that it led had also submitted a formal proposal to the U.K. Treasury and the Prudential Regulation Authority at the Bank of England.
Bank of London CEO Anthony Watson said SVB “cannot be allowed to fail given the vital community it serves.”
“This is a unique opportunity to ensure the U.K. has a more diversified banking sector, whilst allowing continuity of service to SVB’s UK client base. It would be deeply disappointing for this moment to lead to further consolidation of power among big banks.”
The Bank of England confirmed that no other U.K. banks are “directly materially affected by these actions, or by the resolution of SVBUK’s U.S. parent bank,” adding that the wider British banking system remains “safe, sound and well capitalised.”