The British Finance Minister affirmed that HSBC is the largest bank in Europe and SVB UK customers should feel reassured by the strength, safety and security that this bank brings.
According to Reuters news agency, the UK government announced yesterday that HSBC Holdings has acquired the UK branch of Silicon Valley Bank (SVB) for a symbolic price of 1 pound.
The move is intended to rescue the main lender to UK tech startups and help limit the negative impact from the biggest firms.
In a recent statement, HSBC said that the acquisition was purchased entirely from the bank's existing resources.
The bank added that SVB UK branch had £5.5 billion in loans and £6.7 billion in deposits, as of March 10. Meanwhile, the bank recorded a pre-tax profit of £88 million by the end of 2022.
SVB's UK equity is expected to be around £1.4 billion, HSBC added.
Britain's FTSE 100 blue chip share index fell 1% in early trading, after sliding 1.7% on Friday amid more global market turmoil caused by the SVB's collapse. HSBC shares also fell 1.7%.
The Bank of England (BoE) said it staged the sell-off to bolster confidence in the financial system and mitigate any consequences for UK tech companies.
The BoE also confirmed that customer funds remain safe and secure following the HSBC acquisition. "No other UK bank has been severely impacted by this acquisition. The UK banking system remains safe, sound and well-capitalised," the BoE confirmed.
British Finance Secretary Jeremy Hunt added: "HSBC is Europe's largest bank and SVB UK customers should feel reassured by the strength, safety and security they offer."
Besides, he also affirmed: "We were faced with a situation where our most strategic technology companies were at risk of being wiped out because of this bank's collapse, and that This transaction will ensure that customers' deposits are protected and can be banked as usual. I'm glad we reached a resolution in such a short time. ". In addition to the UK, SVB also has branches in China, Denmark, Germany, India, Israel and Sweden.