The UK arm of failed US lender Silicon Valley Bank has been bought by HSBC for a nominal 1 pound ($1.2) in a rescue deal, the government and HSBC announced Monday.
The sale, overseen by the Bank of England and the Treasury, comes after SVB collapsed Friday sparking panic in Britain over its key customers in the technology and life science sectors.
"Silicon Valley Bank (UK) Ltd has today been sold to HSBC," the government said in a statement, after frantic talks reportedly led by Prime Minister Rishi Sunak.
"This transaction has been facilitated by the Bank of England, in consultation with the Treasury."
Finance minister Jeremy Hunt added that no government cash was involved, while all customer deposits have been safeguarded.
"This (deal) ensures customer deposits are protected and can bank as normal, with no taxpayer support," added Hunt.
"I am pleased we have reached a resolution in such short order."
Hunt had warned Sunday that there was a "serious" risk to Britain's tech and life sciences firms that banked with SVB.
HSBC agreed to pay just 1 pound for the business, the bank giant added in a separate statement on Monday.
The Asia-focused lender added that SVB UK had loans of about 5.5 pounds billion and deposits of around 6.7 billion pounds.
"This acquisition makes excellent strategic sense for our business in the UK," said HSBC chief executive Noel Quinn.
"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."
The deal excluded assets and liabilities of SVB UK's parent companies, while HSBC expects a gain to arise from the acquisition.
SVB UK's customers "can continue to bank as usual" and will be "safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC", Quinn noted.
California-based SVB failed after its customers, mainly from the tech sector, made massive withdrawals, and after its latest attempt to raise new money proved unsuccessful.
Its demise is not only the largest bank failure since Washington Mutual in 2008, but also the second-largest retail bank failure in the US.
Monday's news sent HSBC stock sinking in early London deals.
HSBC's share price slid 2.5 percent to 578 pence on the capital's falling FTSE 100 index.
'Hugely welcomed' before budget
London's FTSE 100 and other European stock markets fell sharply on Monday despite the US and UK moves.
But Interactive Investor analyst Victoria Scholar said HSBC's acquisition of SVB UK was a "welcome development for its depositors and the wider banking system".
"It means that SVB UK will avoid insolvency proceedings and its customers will be able to access deposits and banking services as normal from today," she said.
Monday's news will also be a relief for the UK government, with Hunt due to unveil his latest budget on Wednesday against the backdrop of soaring living costs.
The SVB UK sale "will be hugely welcomed by the government, given the looming crisis risked overshadowing Budget Day", noted Hargreaves Lansdown analyst Susannah Streeter.
"A big tech sector bailout would not have been a good look when millions have been told there is little extra money to ease the cost-of-living crisis."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)