Breaking: Silicon Valley Bank UK arm acquired by HSBC for one pound

Global banking giant HSBC is coming to rescue the United Kingdom-based branch of the collapsed Silicon Valley Bank with a new acquisition.

HSBC officially announced on March 13 that its subsidiary, HSBC UK Bank, is acquiring Silicon Valley Bank UK (SVB UK) for 1 British pound ($1.21).

As of March 10, 2023, SVB UK had loans of around 5.5 billion pounds ($6.7 billion) and deposits of around 6.7 billion pounds ($8.1 billion), HSBC said in the announcement.

For the financial year ending Dec. 31, 2022, SVB UK recorded a profit before tax of 88 million GBP ($107 million). SVB UK’s tangible equity is expected to be around 1.4 billion GBP ($1.7 billion).

“Final calculation of the gain arising from the acquisition will be provided in due course,” HSBC wrote, adding that the assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The company added that the acquisition will be funded from existing resources and will be completed immediately.

According to HSBC Group CEO Noel Quinn, the acquisition makes “excellent strategic sense” of HSBC’s business in the United Kingdom, strengthens its commercial banking franchise and enhances our ability to serve innovative and fast-growing firms.

“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world,” Quinn said, adding:

“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.”

The news comes shortly after U.S. authorities ordered SVB to shut down operations on March 10, triggering a wave of panic on crypto markets due to some major crypto companies like Circle and Coinbase having significant exposure to the bank.

Related: Crypto whales suffer huge losses due to USDC depeg, SVB collapse

Circle, the issuer of USD Coin (USDC) — the second largest stablecoin by market value — became unable to withdraw $3.3 billion of its $40 billion reserves due to SVB’s collapse. Coinbase had around $240 million in corporate funds at Signature, expecting to fully recover the amount. Paxos, the issuer of stablecoins like Pax Dollar (USDP) and the troubled Binance USD (BUSD) stablecoin, also had $250 stuck at Signature, but said that its private insurance would cover the amount.