The international HSBC Bank announced Monday that it has agreed to buy the UK branch of the collapsed Silicon Valley Bank.
The move follows a weekend in which industry regulators in the US, Britain, Israel and Canada were scrambling to work out solutions for those whose companies were exposed during the bank’s failure.
HSBC UK Bank agreed to purchase SVB UK for the sum of £1 ($1.21). HSBC shares provisionally closed 4.1 percent lower on Monday following the announcement.
British Finance Minister Jeremy Hunt stressed that the deal “ensures customer deposits are protected and can bank as normal, with no taxpayer support.”
“The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs,” he added.
HSBC Group CEO Noel Quinn said in a statement that the acquisition “strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life sciences sectors, in the UK and internationally.
“SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC,” he added.
The sale was facilitated by the Bank of England in consultation with the UK Treasury.
United Arab Emirates Firm Mulling Purchase of SVB UK
An investment firm controlled by a member of the royal family in Abu Dhabi, Royal Group, was reportedly mulling the possibility of taking over SVB UK, according to people familiar with the matter quoted by The Economic Times.
Royal Group is chaired by UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, who oversees the wealth fund ADQ as well as lender First Abu Dhabi Bank PJSC. Last week, he was also appointed chairman of the emirate’s $790 billion wealth fund Abu Dhabi Investment Authority, according to the report.
No final decision was made, however, and as of Tuesday morning, it was not clear whether a bid would be tabled, especially in light of the HSBC deal to purchase the SVB UK branch.