HSBC headquarters in London. TOBY MELVILLE/REUTERS
SVB UK customers will be able to access their deposits and banking services as normal from today.
The UK branch of bankrupt California bank Silicon Valley Bank (SVB) has been sold to British banking giant HSBC for a token £1, according to simultaneous statements from the UK Treasury, Bank of England and HSBC on Monday. The transaction, financed on theexisting resourcesfrom HSBC, was orchestrated by the Bank of England, in coordination with the Treasury and UK banking and market regulators.
“SVB UK customers will be able to access their deposits and banking services as normal from today“, Specifies the Treasury in its statement. UK Finance Minister Jeremy Hunt clarified that the operation was taking place “without taxpayer support“. “HSBC is Europe’s biggest bank and SVB UK customers should feel reassured by its strength“, he added.
The minister was pleased to havereached a solution in such a short time“, after a weekend of meetings and negotiations, in particular with the sector of technology while many companies of this sector were customers of SVB and feared a brutal drying up of their cash. Jeremy Hunt had admitted this weekend a “serious riskfor this sector. As of March 10, SVB UK held loans of around £5.5 billion and deposits of around £6.7 billion, according to HSBC, which says that “the assets and debts of the parent companies of SVB UK are excluded from the transaction“.
The American authorities, for their part, announced a series of measures on Sunday to reassure individuals and businesses about the solidity of the American banking system. In particular, they will guarantee the withdrawal of all deposits from the bankrupt SVB bank. In addition to SVB, they will allow access to all the deposits of another establishment, Signature Bank, which was closed automatically by the regulator, to everyone’s surprise.
Read alsoUS authorities take control of SVB bank
Threatening Turbulences
The Federal Reserve (Fed) – the US central bank – has also agreed to lend the necessary funds to other banks that need them to honor withdrawal requests from their customers. The acquisition of SVB UK by HSBCmakes perfect strategic sense for the UK. It strengthens our commercial bank and improves our ability to serve high growth and innovative companies, including in technology and biotechnology, in the UK and internationally“said Noel Quinn, CEO of HSBC.
“The White Knights come to the rescue after a weekend of intense negotiations to avoid a contagion effect following the bankruptcy of SVB, which sent shockwaves through the financial and technology sectorscommented Hargreaves Lansdown analyst Susannah Streeter. She also notes that the sale of SVB to HSBC removes a thorn from Downing Street’s foot in the middle of the budget presentation week – scheduled for Wednesday.
“A tech bailout wouldn’t have looked very good when millions of people were told there wasn’t much money left to help them through a severe cost crisis. the life“, she added. HSBC lost 2.97% to 575 pence on Monday around 09:00 GMT on the London Stock Exchange, in a market down 1.68% to 7,618.43 points. HSBC lost 2.97% to 575 pence on Monday around 09:00 GMT on the London Stock Exchange, in a market down 1.68% to 7,618.43 points.
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