LONDON (Reuters) – HSBC announced on Monday that it had bought the British subsidiary of the American bank Silicon Valley Bank for one pound sterling, whose bankruptcy in the United States caused major turmoil in the global banking sector, thus saving a key institution. for UK tech start-ups.
“This acquisition makes very good strategic sense for our UK business,” HSBC chief executive Noel Quinn said in a statement.
The transaction takes effect immediately and comes after the sudden collapse of the American parent company, Silicon Valley Bank, which specializes in financing new technology companies.
Despite the measures taken by the American authorities to limit the risk of contagion, the setbacks of SVB continued to shake the financial markets on Monday, with a new plunge in European banking stocks.
“HSBC is Europe’s largest bank and SVB UK customers should be reassured by the strength, security and safety it brings them,” UK Finance Minister Jeremy Hunt said on Monday.
“We were facing a situation where we could have seen some of our most important businesses – our most strategic businesses – wiped out, which would have been extremely dangerous,” he told reporters.
Meanwhile, the Bank of England said it staged the takeover of SVB UK to bolster confidence in the financial system and minimize the fallout for UK tech companies.
“No other UK bank is directly or materially affected by these actions or by the resolution of SVBUK’s US parent bank. The UK banking system as a whole remains safe, sound and well capitalised,” the Bank of England said. after the announcement of the takeover by HSBC.
“CASH AND CONFIDENCE”
Unlike the United States, Britain has not announced broader liquidity measures for the banking system.
In France, the Minister of the Economy Bruno Le Maire assured Monday that there was no “specific alert” on the French banking sector after the bankruptcy of SVB.
SVB’s UK branch operates independently from the US group, and HSBC said the parent company’s liabilities and assets were excluded from the deal.
As of March 10, Silicon Valley Bank UK Limited had loans outstanding worth around £5.5 billion and around £6.7 billion on deposit at its facility, according to HSBC.
The Bank of England said SVB UK had a total balance sheet of around £8.8bn.
“SVB lacked liquidity and lack of depositor confidence – HSBC has both of these assets in abundance,” said Richard Marwood, senior fund manager at Royal London Asset Management which owns HSBC shares.
Among the candidates to buy SVB UK was Bank of London, which said on Sunday it had submitted a formal offer. OakNorth Bank, owned by SoftBank, has also considered an offer, a source familiar with the matter told Reuters.
Other media reported that Abu Dhabi-backed investment fund ADQ was also interested.
(Report Iain Withers and William Schomberg; Blandine Hénault and Victor Goury-Laffont for the French version, edited by Matthieu Protard and Blandine Hénault)
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