HSBC, one of the world’s largest banking institutions, has agreed to purchase the British arm of Silicon Valley Bank (SVB) for a nominal fee of £1 (about $1.21), following talks that lasted all night, according to a report from CNBC.
The only exceptions to the deal are the assets and liabilities held by SVB’s British parent company.
The acquisition will be carried out by HSBC’s British ring-fenced subsidiary, HSBC UK Bank.
The acquisition is expected to enhance HSBC’s ability to serve innovative and fast-growing firms, including those in the technology and life sciences sectors, in the UK and internationally.
According to CNBC, HSBC CEO Noel Quinn said that the acquisition “strengthens our commercial banking franchise” and assures SVB UK customers that their deposits are secure.
Regulators were forced to shut down SVB after the company’s stock plummeted 60% in pre-market trading last Thursday, as reported by Fox News host Tucker Carlson, who likened the institution’s collapse to the bank run of 1929 or the more recent collapse of cryptocurrency exchange FTX.
This collapse is the largest of any bank since the global financial crisis of 2008, according to the BBC.
SVB specialized in lending to technology companies, and some firms, such as educational start-up Lingumi, held as much as 85% of their cash in SVB.
The co-founder described the weekend following the collapse as “anxious” for the company.