HSBC Group CEO says the acquisition of Silicon Valley Bank is a strategic move aimed to strengthen its "commercial banking franchise."
HSBC, a British multinational universal bank and financial services holding company, is acquiring the United Kingdom-based arm of collapsed Silicon Valley Bank.
According to the March 13th announcement, the company is purchasing Silicon Valley Bank UK for £1 (around $1,21).
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In the announcement, HSBC revealed that as of March 10th, Silicon Valley Bank UK had deposits of around £6.7 billion and loans of approximately £5.5 billion.
On top of that, the company highlighted that at the end of 2022, SVB UK had a “profit before tax of £88 million." HSBC believes that the company's “tangible equity is expected to be around £1.4 billion.”
Moreover, the company highlighted that the acquisition will be "funded from existing resources" and "transaction completes immediately."
Final calculation of the gain arising from the acquisition will be provided in due course. The assets and liabilities of the parent companies of SVB UK are excluded from the transaction.
When talking about the acquisition, HSBC Group CEO, Noel Quinn, revealed that the purchase of Silicon Valley Bank UK is a strategic move aimed at strengthening its “commercial banking franchise and enhance <its> ability to serve innovative and fast-growing firms.” On top of that, Quinn noted:
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.
The company revealed that it will notify the shareholders about the acquisition during its first quarter result meeting, expected to be held on May 2nd, 2023.
The move from HSBC comes days after a California financial watchdog ordered Silicon Valley Bank to cease its operations and shut down. It is worth noting that crypto firms, like Coinbase and Circle, had exposure to the bank.
