Justin Sullivan
HSBC UK Bank (HSBC) will acquire the British unit of failed lender Silicon Valley Bank, owned by SVB Financial (NASDAQ:SIVB), U.K. regulators said on Monday.
The regulators confirmed that depositors’ funds with Silicon Valley Bank UK (SVBUK) are safe as a result of this deal. SVBUK will continue to operate normally.
“This action has been taken to stabilize SVBUK, ensuring the continuity of banking services, minimizing disruption to the U.K. technology sector and supporting confidence in the financial system,” according to a joint statement by the Bank of England, in consultation with the Prudential Regulation Authority, HM Treasury and Financial Conduct Authority.
“This morning, the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC,” British finance minister Jeremy Hunt tweeted. “Deposits will be protected, with no taxpayer support.”
The deal supersedes the central bank’s announcement on Friday, in which it said it would apply to court to place SVBUK into a bank insolvency procedure.
“Given the emergence of a credible purchaser for SVBUK, the Bank has determined that using its resolution powers for stabilizing failing banks is appropriate,” said the BOE.
It clarified that no other U.K. banks are materially affected by these actions. “The wider U.K. banking system remains safe, sound, and well capitalized.”
Earlier, PNC and RBC are reportedly not bidding for Silicon Valley Bank.