Global banking giant HSBC is set to rescue the UK branch of failed Silicon Valley Bank with a new takeover.
HSBC officially announced on March 13 that its subsidiary HSBC UK Bank will acquire Silicon Valley Bank (SVB UK) for £1 ($1.21). SVB UK had about £5.5 billion ($6.7 billion) in loans and about £6.7 billion ($8.1 billion) in deposits as of March 10, 2023, HSBC said in the announcement.
SVB UK made a pre-tax profit of £88m ($107m) in the financial year ending Dec. 31, 2022. SVB UK's tangible assets are expected to be around £1.4 billion ($1.7 billion). "A final calculation of the proceeds from the acquisition will be provided in due course," HSBC wrote, adding that assets and liabilities of SVB UK's parent company were not included in the deal. The company added that the acquisition will be funded from existing resources and will be completed immediately.
HSBC Group chief executive Noel Quinn said the acquisition made "excellent strategic sense" for HSBC's UK business, strengthening its merchant banking business and strengthening its position as an innovative and fast-growing company. Ability to provide services. "We welcome customers of SVB UK to HSBC and look forward to helping them grow in the UK and around the world," Quinn said, adding: "SVB UK customers can continue to bank as usual, knowing their deposits are backed by the strength, safety and security of HSBC."
The news comes after U.S. authorities ordered SVB to shut down operations on March 10, sparking panic in the cryptocurrency market as some major cryptocurrency firms such as Circle and Coinbase have significant exposure to banks. Circle, issuer of the USDC.
The second-largest stablecoin by market capitalization was unable to withdraw $3.3 billion of its $40 billion reserves due to the collapse of SVB. Coinbase has about $240 million in corporate funds at Signature but expects to fully recover that amount. Issuer of stablecoins like Paxos, Pax Dollar (USDP) and embattled Binance USD. The stablecoin also has $250 million stranded at Signature, but says its private insurance will cover that amount.
