As authorities and banking officials scramble to sort out Silicon Valley Bank's situation after the collapse, its UK arm is being bought by HSBC.

HSBC today announced that its UK ring-fenced subsidiary, HSBC UK Bank plc, is acquiring Silicon Valley Bank UK Limited for £1 ($1.21). SVP UK was taken over by the Bank of England after its parent financial group collapsed late last week. 

The lender is buying the UK arm of the stricken California-based bank (see an associated analysis here). There was speculation over the weekend about what would happen to the UK operation and the impact on depositors and clients.

As at March 10, 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said in a statement to the London Stock Exchange. 

For the financial year ending December 31, 2022, SVB UK recorded a profit before tax of £88 million. SVB UK's tangible equity is expected to be around £1.4 billion, HSBC continued.

HSBC said that it will provide the final calculation of the gain arising from the acquisition in due course. 

“The assets and liabilities of the parent companies of SVB UK are excluded from the transaction. The transaction completes immediately. The acquisition will be funded from existing resources,” HSBC said.

"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,” Noel Quinn, HSBC Group CEO, said.

"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,” he added.

HSBC will update shareholders on the acquisition at its Q1 2023 results on May 2, 2023.