HSBC’s UK ring-fenced subsidiary, HSBC UK Bank plc, is acquiring Silicon Valley Bank UK Limited (SVB UK) for GBP1 ($1.63).
The assets and liabilities of SVB UK’s parent companies will be excluded from the transaction, which is expected to be completed immediately.
The acquisition was done in a bid to strengthen HSBC’s banking franchise in the UK, says the bank in its March 13 statement.
“This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally,” elaborates Noel Quinn CEO of HSBC Group.
As at March 10, SVB UK had loans of around GBP5.5 billion and deposits of around GBP6.7 billion.
For the FY2022 ended Dec 31, SVB UK recorded a profit before tax (PBT) of GBP88 million. The bank’s tangible equity is expected to be around GBP1.4 billion.
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“[The] final calculation of the gain arising from the acquisition will be provided in due course,” says HSBC. The acquisition will be funded from existing resources.
“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them,” says Quinn.
HSBC says it will update shareholders on the acquisition at its 1QFY2023 results on May 2.