The global banking giant HSBC comes to the rescue of the British subsidiary of the sunken Silicon Valley Bank with a new acquisition.
HSBC officially announced on March 13 that its subsidiary, HSBC UK Bank, has acquired Silicon Valley Bank UK (SVB UK) for £1 ($1.21).
As of March 10, 2023, SVB UK had loans of about £5 billion ($6.7 billion) and deposits of about £6.7 billion ($8.1 billion), HSBC said in the announcement.
For the year ending December 31, 2022, SVB UK recorded a pre-tax profit of £88 million ($107 million). SVB UK’s tangible own funds are expected to be around £1.4bn ($1.7bn).
“The final calculation of the gain from the acquisition will be provided in due course,” HSBC wrote, adding that the assets and liabilities of SVB UK’s parent companies are excluded from the transaction. The company added that the acquisition would be financed from existing resources and would be completed immediately.
According to HSBC Group CEO Noel Quinn, The acquisition makes “excellent strategic sense” for HSBC’s UK business as it strengthens its retail banking franchise and enhances its ability to serve fast-growing and innovative companies.
“We welcome SVB UK clients to HSBC and look forward to helping them grow in the UK and around the world,” said Quinn, adding:
“SVB UK customers can continue to bank as usual, with the peace of mind that their deposits are backed by the strength, security and protection of HSBC.”
The news comes after the United States authorities ordered SVB to shut down its operations on March 10, sparking panic in the cryptocurrency markets. because some of the major crypto companies, such as Circle and Coinbase, had significant exposure to the bank.
Circle, the issuer of USD (USDC) – the second largest stablecoin by market value – is unable to withdraw USD 3.3 billion of its reserves of 40 billion due to the bankruptcy of SVB. Coinbase had around $240 million in corporate funds in Signature, but expects to recoup the amount in full. Paxos, the issuer of stablecoins like Pax Dollar (USDP) and troubled stablecoin Binance USD (BUSD), also had $250 million locked up in Signature, but said its private insurance would cover the amount.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.