Bank of England backs HSBC rescue of Silicon Valley Bank's UK arm
London, Mar 13 (PTI) The UK government announced on Monday that it has facilitated London-based banking major HSBC to buy the embattled UK arm of Silicon Valley Bank for 1 pound, securing the deposits of more than 3,000 customers worth around 6.7 billion pounds.
Santa Clara, California-based Silicon Valley Bank which specialised in lending to technology companies was shut down by US regulators on Friday in what was the largest failure of a US bank since 2008.
According to experts, although the UK arm of SVB was small with only around 3,000 business customers, its collapse would have presented a risk for the tech sector which is seen as crucial to Britain's economic growth.
HSBC said it bought SVB UK which has a balance sheet of 8.8 billion pounds for 1 pound.
"This acquisition makes excellent strategic sense for our business in the UK," HSBC said.
"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," said Noel Quinn, HSBC group chief executive.
The deal makes use of the UK's post-crisis banking reforms, which introduced powers to safely manage the failure of banks, this sale has protected both the customers of SVB UK and taxpayers. The government said it has a dynamic start-up and scale-up ecosystem and therefore it is pleased that a private sector purchaser has been found for a bank that funds those sectors.
Customers of SVB UK will be able to access their deposits and banking services as normal as a result of the transaction, which was facilitated by the Bank of England in consultation with the UK Treasury department using powers granted by the country's Banking Act 2009.
The Treasury stressed that no taxpayer money is involved.
"The UK's tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday [Sunday] that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK's customers with confidence," said UK Chancellor Jeremy Hunt.
"Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order. HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them," he said.
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India moving towards becoming global economic powerhouse: Kovind
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Amritsar (PTI): Former president Ram Nath Kovind on Friday said that with digital transformation, economic reforms and a strong focus on the ease of doing business, India is moving towards becoming a global economic powerhouse.
He was speaking after inaugurating the 19th edition of the Punjab International Trade Expo (PITEX) in Amritsar.
The former president said that this 19th edition of PITEX is being organised at a time when India is recognised as one of the fastest-growing large economies in the world.
Speaking at the inaugural ceremony of the event organised by the PHD Chamber of Commerce and Industry (PHDCCI) the former president, while referring to Punjab, said the state is a living example of courage, sacrifice and enterprise.
"The spiritual light of Sri Harmandir Sahib (Golden Temple) inspires peace and humanity across the world. The heritage of Punjab is deep and inspiring," Kovind said, according to a statement issued by the PITEX.
The former president congratulated the PHDCCI for hosting the 19th edition of PITEX and suggested that the chamber should expand PITEX outside Punjab.
He proposed that a similar event should also be held in New Delhi.
