Out of the latest dilemma in the American and global tech industry comes a new Silicon Valley Banks owner. Last week we heard about Silicon Valley Bank suffering bankruptcy after customers withdrew a trillion dollars just in one day.
Well, Hongkong and Shanghai Banking Corporation Limited (HSBC) acquired Silicon Valley Bank’s UK operations after the U.S. parent company declared bankruptcy.
HSBC, a small business lender OakNorth, and a consortium of private equity firms led by Bank of London, a clearing bank, had competed for the acquisition of Silicon Valley Bank.
However, after a private meeting between HSBC Chief Executive, Noel Quinn, the UK government, and the Bank of England, Silicon Valley Bank’s UK operations were handed to HSBC for £1 per share on Monday.
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New Silicon Valley Bank owner
This is the second-largest bank failure in the United States since its financial crisis in 2008. The insolvency of Silicon Valley Bank has led to fear of another financial crisis that might spread to the global financial market.
In a bid to forestall the impact of Silicon Valley Bank’s collapse on its financial and tech sector, considering the many tech startups that depend on the firm, the UK government secured a deal for the firm instead of taking over its assets.
Speaking on the acquisition of Silicon Valley Bank, which holds £6.7 billion in deposits, HSBC’s Quinn said, “This acquisition makes excellent strategic sense for our business in the UK.
“It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life science sectors, in the UK and internationally.”
UK chancellor, Jeremy Hunt, tweeted on Monday that “the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC”.
“We will protect deposits, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”