HSBC enhances technology, life sciences profile, scale in Britain with SVB UK rescue
- HSBC plans to inject US$2.4 billion into collapsed Silicon Valley Bank’s British arm after acquiring business for nominal fee
- Deal comes as UK government places greater emphasis on domestic tech sector for future growth
In doing so, the London-based lender gained about £5.5 billion in loans and £6.7 billion in deposits, without taking on any of the liabilities of SVB UK’s parent. HSBC also gained greater scale and standing with Britain’s tech industry, a key area the UK government is targeting for future growth.
“I think the ability to immediately close this acquisition is net positive for HSBC, though not very large relative to the size of the whole global bank,” said Michael Makdad, senior equity analyst at Morningstar.
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SVB UK’s loan exposure would only represent about 0.7 per cent of HSBC’s total loan portfolio globally and its deposit size is about 0.5 per cent of its total deposit base, Makdad said.