HSBC buys SVB’s UK business for over $1

Hong Kong/London (CNN) HSBC has taken over the UK arm of the failed Silicon Valley bank, securing the future of thousands of British tech firms that hold cash with the lender.

If no buyer had been found, SVB UK would have been Following the shock was placed in bankruptcy by the Bank of England Decline Its parents are in America.

In a statement, the central bank said it “can confirm that all depositors’ money with SVB UK is safe and secure as a result of this transaction”.

HSBC, Europe’s biggest bank, announced the £1 ($1.2) deal on Monday morning, saying it would take effect “immediately”.

The acquisition should “end the nightmare that thousands of tech companies have been experiencing over the past few days,” Susanna Streeter, head of money and markets at investment platform Hargreaves Lansdowne, said in a statement.

SVB UK is a key banking partner of Britain’s technology sector, and the failure of its parent has left tech executives scrambling to find ways to get their cash to pay staff and cover operating costs.

The HSBC bailout is “great news” for the UK startup ecosystem, said Piotr Pisars, CEO of Uncapt, a financial technology startup that lends to other startups. “I think we can all relax a bit today,” he told CNN.

To help companies meet payroll and other obligations, Uncapped Saturday has launched an emergency funding scheme. The SVB has received “hundreds” of applications from UK and US companies on Monday, according to Pizars, which is willing to support companies affected by the collapse. Uncapped also offers long-term bridge loans to help with working capital.

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Pizars said startups may diversify their banking relationships because of this phenomenon. He added that having half of Britain’s startup ecosystem bank with one company was an “unhealthy situation”.

HSBC CEO Noel Quinn said in a statement that the acquisition “means SVB UK customers can continue to bank as usual, knowing their deposits are backed by HSBC’s strength, safety and security.”

“This acquisition makes great strategic sense for our business in the UK,” he said. “This strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing companies, including in the technology and life sciences sectors, both in the UK and internationally.”

HSBC’s London-listed shares fell after the market opened and were down 2.9% in morning trade. The Stoxx Europe 600 banking index also traded down 4%.

As of last Friday, SVB UK had approximately £5.5 billion ($6.7 billion) in loans and around £6.7 billion ($8.1 billion) in deposits. HSBC report. It posted a pre-tax profit of £88 million ($106.5 million) in its last financial year, which ended in December.

SVB, a lender best known for financing startups, has been facing liquidity concerns in the US, triggering a major bank run last week. This ultimately led to its downfall Second largest in financial institution in American history, Friday.

US financial regulators were quick to respond Worries about infection week end, declares Customers of the failed bank will receive all their money from Monday.

Officials have guaranteed deposits for customers of Signature Bank, a regional U.S. lender that was shut down by regulators in recent days after facing financial trouble.

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— Hannah Giady Contributed report.

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