Hong Kong/London (CNN) HSBC has snapped up the UK arm of Silicon Valley Bank for £1 ($1.2), just days after its US business collapsed in stunning fashion.
SVB UK would have been placed into insolvency by the Bank of England following the failure of the parent company if a buyer had not been found.
In a statement, the Bank of England said it “can confirm that all depositors’ money with SVB UK is safe as a result of this transaction.”
Europe’s biggest bank announced the acquisition early Monday morning, saying the deal would take effect “immediately.”
In a statement, HSBC chief executive Noel Quinn said the deal means “SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”
“This acquisition makes excellent strategic sense for our UK business,” he said. “It strengthens our commercial banking business and enhances our ability to serve innovative and fast-growing businesses, including in the technology and life-sciences sectors, in the UK and internationally.”
As of last Friday, SVB UK had loans of approximately 5.5 billion pounds ($6.7 billion) and deposits of about 6.7 billion pounds ($8.1 billion), according to the statement. It also made a pre-tax profit of £88 million ($106.5 million) in the last financial year that ended in December.
SVB, a lender best known for providing funding to startups, had been facing liquidity concerns in the US, triggering a major bank run last week. That ultimately led to its collapse, the second largest of a financial institution in US history, on Friday.
US financial regulators reacted quickly to concerns about contagion over the weekend, announcing that customers of the failed bank would be able to access all their money from Monday.
Authorities also guaranteed deposits for customers at Signature Bank, a regional U.S. lender that has been shuttered by regulators because it had faced financial problems in recent days.
— This is a developing story and will be updated.