HSBC puts £2 billion into SVB UK after buying it for £1
London: HSBC injected nearly £2 billion into the United Kingdom arm of collapsed United States-based Silicon Valley Bank – which it bought this week for a nominal £1, or ₹99 – and is ready to ‘deploy more cash and liquidity as needed’, according to a LinkedIn post by HSBC UK CEO Ian Stuart. Employees were also asked to reassure clients ‘deposits are safe and loans are supported’.
“Please continue to operate as usual … it is vital that you continue to serve your clients as you have done up to now,” the memo that was sent to SVB UK staff Tuesday and shared online said.
Offering a ‘very warm welcome’, the memo – signed by Stuart and group CEO Noel Quinn – also said HSBC is making this acquisition because we think SVB UK has great people, great customers and great potential’.
HSBC said on Monday it is acquiring the UK subsidiary of Silicon Valley Bank for 1 pound.
The move comes after US authorities moved to shore up deposits and stem any wider fallout from the sudden collapse of its parent, tech startup lender Silicon Valley Bank.
Silicon Valley Bank UK Limited had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said.
SVB UK’s tangible equity is expected to be around £1.4 billion, HSBC said. It will complete the transaction immediately and fund it from the bank’s existing resources. Further, the assets and liabilities of the parent companies of SVB UK are excluded from the transaction.
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