HSBC acquires UK division of failed Silicon Valley Bank for £1

HSBC has saved the day by buying Silicon Valley Bank UK at the last minute. This has prevented chaos in Britain’s tech industry.

The British bank has paid £1 for the business, after discussions with other lenders, start-up representatives and the Treasury over the weekend.

Silicon Valley Bank UK had loans of about £5.5bn and deposits of around £6.7bn, and it made a profit of £88m last year. The Bank of England confirmed the deal this morning, along with the Prudential Regulation Authority and the Financial Conduct Authority.

The Bank of England said: “We took this action to stabilise Silicon Valley Bank UK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system. All depositors’ money with Silicon Valley Bank UK is safe and secure as a result of this transaction.

“Silicon Valley Bank UK’s business will continue to be operated normally. All services will continue to operate as normal and customers should not notice any changes.”

Silicon Valley Bank UK collapsed over the weekend, and the Bank of England took control of the lender after a bank run on its US branch made it unviable.

Chancellor Jeremy Hunt said: “The Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK. This ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution so quickly.”