The banking giant HSBC has announced that it would acquire Silicon Valley Bank UK for the value of one pound. HSBC here comes to rescue the UK – based branch of Silicon valley that collapsed with the new acquisition. On March 13, 2023, HSBC officially announced that its HSBC UK Bank which is its subsidiary will acquire Silicon Valley Bank (SVB) for 1 British Pound.
Reportedly, on March 10, 2023, SVB UK had loans worth 5.5 billion Pounds with deposits of around 6.7 billion Pounds. Additionally, the bank’s tangible equity is estimated to be around 1.4 billion Pounds. However, the final calculation for executing the acquisition will be on a due course basis. Alongside, HSBC also indicated that the acquisition will be funded through existing resources.
HSBC further added that acquisition is a part of its excellent strategic sense for its UK branch as this acquisition would strengthen HSBC’s commercial banking franchise. Moreover, it would enhance the bank’s ability to serve fast–growing and innovative companies. HSBC further added that SVB UK customers can continue banking like before.
This news came after the authorities in the USA instructed SVB to shut down their operations on March 10. This order from US authorities triggered the complete crypto market as crypto giants like Circle and Coinbase had significant exposure with the SVB.
The Circle, which has the second largest Stablecoin by market value, was unable to withdraw $3.3 billion out of its $40 billion reserve due to SVB’s collapse. On the other hand, Coinbase also had difficulty recovering its corporate funds. Thus, this news of the SVB acquisition by HSBC in the UK came as a relief for the entire ecosystem.
