The UK branch of bankrupt California bank Silicon Valley Bank (SVB) has been sold to British banking giant HSBC for £1, the UK Treasury and HSBC said in simultaneous statements on Monday.
HSBC UK Bank, the banking giant’s UK subsidiary, “tokenly acquires Silicon Valley Bank UK Limited (SVB UK) for £1,” writes the British bank in its press release.
“Silicon Valley Bank (UK) was sold to HSBC today. (…) SVB UK customers can access their deposits and banking services as normal from today,” the Treasury explained in its statement.
As of March 10, SVB UK held around £5.5 billion in loans, according to HSBC.
UK Treasury authorities acted urgently all weekend after SVB’s bankruptcy announcement to reassure markets and try to limit the damage to the tech sector, for which this bankruptcy filing poses a “serious risk”, Treasury Secretary Jeremy Hunt has admitted .
For their part, the US authorities announced on Sunday a series of measures to reassure individuals and companies that the US banking system is sound. In particular, they will guarantee the withdrawal of all deposits from the insolvent SVB bank.
As well as SVB, to everyone’s surprise, they will allow access to all deposits from another entity, Signature Bank, which has been automatically shut down by the regulator.
The Federal Reserve (Fed) – the US Federal Reserve – has also agreed to lend to other banks the funds they need to fulfill their customers’ withdrawal requests.