HSBC buys failed lender Silicon Valley Bank UK

The Government and Bank of England have “facilitated a private sale” of Silicon Valley Bank UK to HSBC without taxpayer support, Jeremy Hunt said today.

The Chancellor added that from today SVB UK customers can access their deposits and banking services as usual.

He also said the transaction was facilitated by the Bank of England, in consultation with the Treasury, using powers granted by the Banking Act 2009.

California-based parent Silicon Valley Bank imploded and its assets seized by US regulators on Friday – the biggest bank collapse since the 2008 financial crisis.

As a result, the Bank of England declared its British subsidiary bankrupt last night.

Chancellor Jeremy Hunt announced today that Silicon Valley Bank UK has been sold to HSBC

This morning, Mr Hunt said: “The UK technology sector is truly a world leader and is hugely important to the UK economy, supporting hundreds of thousands of jobs.

“I said yesterday that we will look after our technology sector and we have worked hard to deliver on that promise and find a solution that gives SVB UK customers confidence.

“Today the Government and Bank of England facilitated a private sale of Silicon Valley Bank UK; This ensures that customer deposits are protected and can be transferred as usual without taxpayer assistance. I am pleased that we have come to a solution in such a short time.

‘HSBC is Europe’s largest bank and customers of SVB UK should feel reassured by the strength and security they bring with them.’

All deposits are “safe and secure” following the sale of Silicon Valley Bank UK to HSBC, the Bank of England (BofE) said.

In a statement, BofE said: “The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley to Bank UK Limited (“SVBUK”), the UK subsidiary of US Bank, to HSBC UK Bank Plc (HSBC). HSBC is authorized and regulated by the PRA and the FCA.

California-based parent Silicon Valley Bank imploded and its assets seized by US regulators on Friday – the biggest bank collapse since the 2008 financial crisis

“This measure was taken to stabilize SVBUK, ensure continuity of banking services, minimize disruption to the UK tech sector and boost confidence in the financial system.

“The Bank and HMT can confirm that all depositors’ funds are safe and secure with SVBUK as a result of this transaction. SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as usual and customers should not notice any changes.

“Customers can continue to contact SVBUK through the usual channels and borrowers should make all loan repayments to SVBUK as usual. SVBUK staff will remain employed by SVBUK and SVBUK will continue to be a PRA/FCA authorized bank.’

Noel Quinn, Chief Executive of HSBC, said: ‘This acquisition makes a lot of strategic sense for our UK business.’

Source: | This article originally belongs to Dailymail.co.uk