Europe’s largest lender HSBC is set to buy the UK arm of Silicon Valley Bank for £1.
SVB UK had a total balance sheet size of approximately £8.8bn and a deposit base of approximately £6.7bn.
Customers of SVB UK will be able to access their deposits today.
The decision was taken by the Bank of England (BoE), in consultation with the Prudential Regulation Authority, HM Treasury and the Financial Conduct Authority (FCA).
Although, it has also been reported that Prime Minister Rishi Sunak followed the events closely, despite being in California for a defence meeting.
The BoE will act as a guarantor on the deal, with no UK taxpayer money involved.
Chancellor of the Exchequer Jeremy Hunt said: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.
“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
“The government and the BoE have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order."
HSBC was not the only ‘white knight’ to step in and offer to take over the bank with a number of fintech challengers making overtures.
This includes Oaknorth and The Bank of London which, respectively, made bids.
“It is great news that a speedy solution has been found for Silicon Valley Bank UK Limited, and the thousands of businesses it supports across fintech, life sciences and new technologies," The Bank of London Group CEO Anthony Watson said.
"Today’s decision means a vital community helping to foster innovation in our country continues to receive banking services without interruption.
“For many, this will be seen as a missed opportunity to support competition and innovation. It cannot be right that once again the heritage banks that have provided a poor service to UK entrepreneurs over many years benefit from their already dominant, privileged position. Britain needs better.”
Nonetheless, the news was welcomed by many investors including Haakon Overli, General Partner of Dawn Capital.
“On behalf of our Dawn companies with 2,400 employees in the UK, we welcome the hugely positive news of HSBC’s acquisition of the UK arm of SVB announced this morning," Overli continued. "The scale and magnitude of the crisis which has been averted in the UK tech sector should not be underestimated."
This story was originally published on AltFi