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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Will Champai Soren become a game-changer for BJP in Jharkhand polls?
Ranchi: Champai Soren, a prominent figure in Jharkhand’s statehood movement, is contesting the 2024 assembly elections from Seraikela, a seat he has consistently held since 1991.
However, there is a surprising shift in his political journey this year. Having resigned from the Jharkhand Mukti Morcha (JMM) earlier this year, Soren is now representing the BJP, a move that could significantly impact the electoral dynamics in the state.
Soren’s switiching is seen as a strategic benefit for the saffron party, which has been working to expand its appeal among Jharkhand’s tribal communities, a demographic traditionally aligned with the JMM. His departure from the JMM, led by Shibu Soren and his son Hemant Soren, was fueled by dissatisfaction with the state government’s policies, which he claimed had failed to address tribal concerns.
Also known as "Jharkhand’s Tiger" for his instrumental role in the statehood movement of the 1990s, Champai Soren has respect and influence among tribal voters. His decision to switch the party could be a turning point in the BJP’s efforts to gain a stronger hold in a state where tribal votes often decide the outcome.
