HSBC bought the bankrupt subsidiary of Silicon Valley Bank in the UK for one pound

The bank HSBCthe largest in Europe, bought the British subsidiary of Silicon Valley Bank on Monday for a symbolic price of one poundsaving a key player for UK tech start-ups and helping stem the fallout from the biggest banking crash since the 2008 financial crisis.

In a statement sent to the Hong Kong Stock Exchange, where it is listed, HSBC estimates the tangible capital of the British subsidiary of the SVB at around 1,400 million pounds (1,694 million dollars, 1,581 million dollars).

The operation comes after the American authorities decided to consolidate the deposits and stem any wider contagion from the sudden bankruptcy of its parent company, Silicon Valley Bank.

The deal, which sees HSBC, one of the world’s largest banks with assets worth $2.9 trillion, take over the UK arm of the tech bank, ends frantic weekend talks between the UK government, regulators and potential buyers.

“HSBC is the largest bank in Europe, SVB UK customers should be reassured by the strength, security and protection it offerssaid Britain’s Chancellor of the Exchequer, Jeremy Hunt.

“We were faced with a situation where we could have seen some of our most important businesses – our most strategic businesses – disappear, that would have been extremely dangerous,” Hunt told reporters.

Asked about HSBC’s “white knight” role, Hunt said the priority of the Ministry of Finance was to avoid the use of taxpayers’ money British. One pound, the symbolic price of the operation, is worth 1.21 dollars.

The Bank of England said it staged the sale to boost confidence in the financial system and minimize the fallout for UK tech companies.

the monetary institution said bank deposits are safe following the saleadding that the banking system in general is safe.

MP Harriett Baldwin, head of the Treasury Select Committee, hailed the sale deal as the “best possible result in these difficult circumstances”.

“Thank you to everyone who worked tirelessly to make this happen. I look forward to the opportunity to ask questions in the UK Parliament later,” Baldwin tweeted.

Britain’s FTSE 100 index was down 1% in early trading on Monday, after falling 1.7% on Friday as turmoil in global markets was sparked by the bankruptcy of SVB. HSBC shares fell 1.7%.

“At first glance, Sounds like a good dealsaid Richard Marwood, fund manager and investor in HSBC from Royal London Asset Management. “SVB lacked liquidity and depositor confidence; HSBC has both in abundance”.

SVB UK is separate from the American group. HSBC said that the assets and liabilities of the parent company have been excluded from the transaction.

“This acquisition makes excellent strategic sense for our UK business,” HSBC CEO Noel Quinn said in a statement.

SVB UK has loans of around £5.5bn and deposits of around £6.7bnHSBC said, adding that the acquisition was completed immediately.

According to the Bank of England, SVB UK has a total balance of approximately £8,800 million.

Unlike the US, the UK has not announced broader liquidity measures for its banking system.

Dozens of UK listed companies released statements on their exposure to SVB UK on Monday, trying to reassure investors, or in some cases warn them, just as news of the bailout deal broke.

THG, an online retail platform, card maker Moonpig and Naked Wines released statements saying they are not exposed or do not expect to be affected by the situation. Diaceutics has warned that its liquidity will be affected.

Other companies had also studied the possibility of buying the bank. The Bank of London said on Sunday it had submitted a formal proposal. OakNorth Bank, owned by SoftBank, was also evaluating an offer, a person with knowledge of the talks told Reuters.

(With information from Reuters and EFE)

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