HSBC Rescues British Arm of Stricken Silicon Valley Bank  

 

• HSBC (HSBA.L) bought the UK arm of Silicon Valley Bank for a symbolic one pound on Monday, rescuing a key lender for technology start-ups in Britain, as the biggest bank collapse since the financial crash continued to roil markets.
• The deal, which sees one of the world's biggest banks, with $2.9 trillion of assets, take the doomed British arm of the tech lender under its wing, brought to an end frantic weekend talks between the government, regulators, and prospective buyers. It came after U.S. authorities moved on Sunday to shore up deposits and try to stem any wider contagion from the sudden collapse of its parent Silicon Valley Bank (SIVB.O).
• However, a global rout in stocks continued on Monday, with European banks (.SX7P) shedding as much as 6% on the day. That left them on track for their worst two-day drop since the Ukraine war began in February 2022. HSBC shares were down 3.8%.
• "HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety, and security that brings them," Britain's finance minister Jeremy Hunt said.
• The Bank of England said it had organised the sale to underpin confidence in the financial system and minimise any fallout for British technology firms. It said deposits at the bank were safe as a result of the sale and that the wider banking system was safe.

(Source: Reuters)