HSBC has acquired the British arm of Silicon Valley Bank (SVB) for £1, securing the deposits of more than 3,000 customers worth £6.7bn.
Talks were led by British Prime Minister Rishi Sunak and the Bank of England, who said all depositors’ money with SVB UK was safe and secure as a result of the purchase.
The acquisition was welcomed by HSBC’s CEO Noel Quinn, who said it makes “excellent strategic sense” for their business in the UK, strengthening their commercial banking franchise and enhancing their ability to serve innovative and fast-growing firms, particularly in the technology and life-science sectors in the UK and internationally.
SVB UK has over 3,300 clients, including startups and VC, and all its services will continue to operate as normal, according to a statement by the bank. Customers should not notice any changes.
The purchase was deemed necessary by the British Chancellor of the Exchequer, Jeremy Hunt, who stated that “a number of our most promising and important technology and life science companies had their money with Silicon Valley Bank in the UK branch. When you have very young companies, very promising companies, they’re also fragile. They need to pay their staff. And they were worried that as of 8:00 this morning, they might literally not be able to access their bank accounts.”
With this acquisition, HSBC aims to strengthen its foothold in the technology and life-science sectors and boost its commercial banking franchise in the UK.