By Iain Withers
LONDON (Reuters) -HSBC said on Monday it is acquiring the UK subsidiary of stricken Silicon Valley Bank for 1 pound, rescuing a key lender for technology start-ups in Britain.
“This acquisition makes excellent strategic sense for our business in the UK,” HSBC CEO Noel Quinn said in a statement.
The move comes after U.S. authorities moved to shore up deposits and stem any wider fallout from the sudden collapse of its parent, tech start-up lender Silicon Valley Bank.
After the announcement was made, the Bank of England said Britain’s banking system was sound.
“No other UK banks are directly, materially affected by these actions, or by the resolution of SVBUK’s U.S. parent bank. The wider UK banking system remains safe, sound, and well capitalised.”
SVB UK is ringfenced from the U.S. group, and HSBC said the assets and liabilities of the parent company were excluded from the transaction.
The deal brings to an end frantic talks between the government, regulators, and prospective buyers for the UK business over the weekend.
As of March 10, Silicon Valley Bank UK Limited had loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds, HSBC said.
SVB UK’s tangible equity is expected to be around 1.4 billion pounds, HSBC said.
The transaction completes immediately, the bank added.
Unlike the United States, Britain has not announced broader liquidity measures for the banking system.
(Reporting by Iain Withers; editing by John O’Donnell and Jason Neely)