On March 13, 2023, HSBC UK Bank plc, a subsidiary of the banking giant, announced its acquisition of Silicon Valley Bank UK Limited (SVB UK) for a nominal £1, offering protection for depositors without any taxpayer support. The embattled Silicon Valley Bank now comes under new ownership in the UK.
The acquisition of SVB by HSBC means that depositors at the British branch of SVB can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety, and security of HSBC.
The UK finance ministry told Decrypt via email that “customers of SVB UK will be able to access their deposits and banking services as normal from today,” while the UK’s Chancellor of the Exchequer Jeremy Hunt tweeted that “deposits will be protected, with no impact on customers.”
SVB UK, like its parent company in California, served businesses in the tech and startup world. The branch held roughly $8.1 billion (£6.7 billion) in deposits and held loans of roughly $6.6 billion (£5.5 billion), per the filing.
In a statement provided to Decrypt by his office, Jeremy Hunt said that, “the UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after it, and this news shows that we are doing just that.”
What was Silicon Valley Bank?
Silicon Valley Bank, a popular bank among tech and startup-focused clients, suffered a liquidity crisis last week. This prompted a bank run, with clients withdrawing their deposits to extend their runway. With mismatched maturity dates, SVB was forced to sell Treasuries at a loss, worsening its situation. Following rumors of a liquidity crisis and a possible stock sale, the bank was shut down on Friday.