HSBC, the largest bank in Europe, on Monday said it had bought the United Kingdom (UK) operations of the failed U.S. lender Silicon Valley Bank (SVB) for a single symbolic pound (1.21 U.S. dollar). The move is expected to save many British startups from huge losses.
"This acquisition makes excellent strategic sense for our business in the UK," HSBC Group Chief Executive Officer Noel Quinn said in a statement, adding that SVB UK customers "can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC."
London-headquartered HSBC is one of the world's largest banking and financial services institutions, serving 39 million customers globally, according to the UK government.
In a statement issued on Monday, Chancellor of the Exchequer Jeremy Hunt said the UK government and the Bank of England had facilitated the private sale of SVB UK. It "ensures customer deposits are protected and can bank as normal, with no taxpayer support," he added.
The acquisition overrode a decision made by the Bank of England on Friday to place SVB UK into a bank insolvency procedure. "SVB UK has a limited presence in the UK and no critical functions supporting the financial system," the central bank said in a statement.
U.S. California authorities on Friday closed SVB, then the 16th largest bank in the United States, after the tech-focused lender reported huge losses from securities sales, sparking a run on the bank's deposits.
The SVB collapse is the largest bank failure since the collapse of U.S. savings and loan association Washington Mutual in 2008.