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> HSBC announced it had acquired the UK subsidiary of SVB for £1. What. Well, honestly, well done everybody. This was resolved over a weekend. And shows that it can be resolved.
But how? Surely it was worth more than that?
They’ve paid £1 (symbolic purchase price) but it’ll cost them a lot more.
Earlier quoted context omitted.
Too bad HSBC USA didn't take the US arm. HSBC have been exiting the US market for a while and more competition is always better.
We don't know who bought SVB yet it will likely be announced tomorrow (EST/PST timezone) probably. The US gov announcing the full confidence of deposits wasn't merely an altruistic move, they likely had a buyer at the time of announcement and maybe a secondary commitment to support the mortgage debt which caused the whole thing.
> HSBC announced it had acquired the UK subsidiary of SVB for £1. What. Well, honestly, well done everybody. This was resolved over a weekend. And shows that it can be resolved.
But how? Surely it was worth more than that?
> HSBC announced it had acquired the UK subsidiary of SVB for £1. What. Well, honestly, well done everybody. This was resolved over a weekend. And shows that it can be resolved.
But how? Surely it was worth more than that?
But yeah, they surely should have been able to find someone willing to pay 100-10000% more than that.
> As at 10 March 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88m.
Earlier quoted context omitted.
We don't know who bought SVB yet it will likely be announced tomorrow (EST/PST timezone) probably. The US gov announcing the full confidence of deposits wasn't merely an altruistic move, they likely had a buyer at the time of announcement and maybe a secondary commitment to support the mortgage debt which caused the whole thing.
You may be right, but the news coverage I've seen implies that the full backstop of all deposits regardless of size was announced because there is no buyer for SVB. Basically, there just wasn't enough time for buyers to feel comfortable with pulling the trigger.
Earlier quoted context omitted.
But how? Surely it was worth more than that?
They’ll be taking on some debt too. They’ve paid £1 (symbolic purchase price) but it’ll cost them a lot more.
They are getting customers (the deposits owed to those customers is debt), but they will also be getting illiquid assets that should more or less cover the value of those deposits.
They will need to use their own liquid cash in the short term to cover any withdrawals. But in the long term they get to keep some of the customers and they should eventually profit when those illiquid assets mature.
Seems like a great deal for HSBC? Presumably the competition regulator gives deals like this a free pass. > As at 10 March 2023, SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88m.