The Washington Post

HSBC agrees to acquire U.K. subsidiary of California lender for just over $1

British government facilitate­s deal, says deposits will be protected

- BY ANNABELLE TIMSIT Jeff Stein, David J. Lynch, Tony Romm, Tyler Pager and Julian Mark contribute­d to this report.

LONDON — HSBC has agreed to buy Silicon Valley Bank’s subsidiary in the United Kingdom for 1 pound — just over $1 — under a deal facilitate­d by the British government and the Bank of England following the U.S. lender’s collapse.

“This acquisitio­n makes excellent strategic sense for our business in the UK,” the chief executive of HSBC, Noel Quinn, said in a statement Monday.

The British government said customer deposits would be protected “with no taxpayer support.”

“Customers of SVB UK will be able to access their deposits and banking services as normal from today,” it said in a statement.

Under the terms of the agreement, HSBC’S U.K. subsidiary will finance the acquisitio­n of Silicon Valley Bank UK Limited, which is expected to be completed immediatel­y. The deal excludes all assets and liabilitie­s of the parent company, SVB.

The U.K. deal comes after the Biden administra­tion moved to protect SVB customers from losses, announcing Sunday night that depositors would have access to all their money on Monday morning, approving an extraordin­ary interventi­on aimed at averting a crisis in the financial system.

Authoritie­s said they were also extending protection to depositors of Signature Bank in New York, which state regulators closed Sunday as unease in the financial sector spread.

The British government, the

Bank of England and British financial regulators had been searching for days for a buyer for SVB’S U.K. subsidiary to protect the country’s tech sector. U.K. start-ups are particular­ly reliant on the bank for financing but found themselves in uncertain waters after U.S. regulators shut down SVB on Friday, in what amounted to the second-biggest bank collapse in U.S. history.

Jeremy Hunt, Britain’s finance minister, said the government

“worked urgently to deliver” on a promise to “look after” the sector and the bank’s customers.

The Bank of England said it approved the sale “to stabilise SVBUK,” ensure “the continuity of banking services,” minimize “disruption to the UK technology sector” and bolster “confidence in the financial system.”

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