Hong Kong and Shanghai Banking Company Limited (HSBC) has bought Silicon Valley Bank’s UK operations, preventing a spread of the problem to its parent business in the US.
The UK government mediated the agreement between Silicon Valley Bank’s UK subsidiary and Hong Kong and Shanghai Banking Corporation Limited (UK).
When surging inflation and interest rates have an impact on its investment in the U.S. bond market, Hongkong and Shanghai Banking Corporation rushed to purchase Silicon after the company’s parent company in the U.S. filed for bankruptcy.
While the US business is currently looking for a buyer, Hongkong and Shanghai Banking Corporation Limited has acquired the UK subsidiary for £1 per share.
For the purchase of Silicon Valley Bank in the UK, bids were submitted by Hongkong and Shanghai Banking Corporation Limited, OakNorth, and Bank of London.
But, following a private conversation with the company’s Chief Executive, Noel Quinn, the UK government and the Bank of England chose Hongkong and Shanghai Banking Corporation Ltd.
“The government and the Bank of England enabled a private sale of Silicon Valley Bank UK to HSBC,” UK chancellor Jeremy Hunt stated on Twitter.
Deposits will be preserved without any help from the taxpayer, according to Hunt. I promised to protect the IT sector yesterday, and we have been working hard to keep that pledge.
According to HSBC’s Quinn, the acquisition will benefit the company’s operations in the UK and increase its capacity to support creative and rapidly expanding businesses.
“For our company in the UK, this acquisition makes tremendous strategic sense. It improves our ability to serve creative and quickly expanding businesses, especially those in the technology and life science industries, both domestically and abroad, and strengthens our commercial banking franchise.