silicon valley bank crisis, silicon valley bank cost only ₹ 99! HSBC to buy entire UK unit of the bank

New Delhi: A banking crisis is looming over America. First the lock on Silicon Valley Bank. Signature Bank was then ordered to be closed. After this banking crisis of America, there is a danger of recession all over the world. The closure of Silicon Valley Bank, which is counted among America’s top banks, has started affecting other sectors. Meanwhile, an offer has been made to buy the British unit of Silicon Valley Bank (SVB UK Unit). HSBC Bank has decided to buy the UK unit of Silicon Valley Bank. It has been announced to buy it for just one pound i.e. around Rs 99.18. HSBC has announced the purchase of the UK branch of Silicon Valley Bank for £1.

HSBC will acquire

HSBC UK Bank plc is taking over Silicon Valley Bank UK Ltd (SVB UK) after a weekend of frantic negotiations by UK executives. In a statement, HSBC says the transaction was completed immediately, reports the Guardian. The acquisition will be funded from existing resources.

As of March 10, 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said. For the financial year ending December 31, 2022, SVB UK reported a profit before tax of £88 million. The tangible equity of SVB UK is expected to be approximately £1.4 billion. A final calculation of the gain from the acquisition will be provided in due course. The Bank of England says the sale to HSBC is intended to stabilize SVBUK.

The Guardian reported that the UK central bank says the deal will ensure the continuity of banking services, minimize disruption to the UK technology sector and support confidence in the financial system. Importantly, the Bank of England and HM Treasury can confirm that all depositors’ money is safe with SVBUK as a result of this transaction. The Guardian reported that this would be a huge relief for tech companies, who feared an existential threat to their businesses if SVB UK lost their funds. BOE said that the deal with HSBC i.e. SVB UK will no longer be put into bankruptcy.