I read this as "HSBC to Arm Silicon Valley Bank", which is an entirely different customer-management strategy.
We... would like you to leave your deposits here with us.
HSBC to Buy UK Arm of Silicon Valley Bank
21–30 of 156 posts
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#22Earlier quoted context omitted.
But how? Surely it was worth more than that?
As anyone who has played Civ4 knows, everything is worth what its purchaser will pay for it. But yeah, they surely should have been able to find someone willing to pay 100-10000% more than that.
Buying for £1 is a common thing in the UK for companies in distress. In reality it’s worthless so should be £0 due to the mountain of worth and risk they need to wade through to realise the value, but UK contract law requires some kind of consideration (I think that’s the right term, my contract law for engineers module was a while ago now) for both sides otherwise it’s not a valid contract.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#23Wasn't SVB UK fine and unaffected by events in US?
In the sea of information about this, other than 'all is good', I didn't know UK branch was being taken over and sold as well.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#24Surprised Goldmans didn't buy them - and position it as Marcus for Startups.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#25Re: HSBC to Buy UK Arm of Silicon Valley Bank
#26Wasn't SVB UK fine and unaffected by events in US? In the sea of information about this, other than 'all is good', I didn't know UK branch was being taken over and sold as well.
The public messaging on Friday from SVB UK was that they were entirely ring-fenced, all is well etc. But behind the scenes they were going to the Bank of England asking for emergency funding. So by Saturday the wheels were turning on the insolvency processes. I guess the US media was focussed on the US side of things, in the UK there has been a lot of noise about lots of UK startups having money tied up in SVB UK and how things need to be done to sort the situation.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#27Earlier quoted context omitted.
But how? Surely it was worth more than that?
Over the long term SVB may have a positive net value, but unlocking that is likely to require short term cash injections to meet current liabilities (not to mention restaffing/integrating the bank). Those costs are the real price that HSBC is paying for SVB.
Worth mentioning that HSBC recently announced an absolutely banging quarter and are in a great position to take advantage of this situation.
This is pretty much the old Berkshire playbook, buy distressed assets at giant discounts.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#28Seems 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.
It's said that no bank (even the best-managed) can withstand a fullscale bank run. So to the extent that the US side of things created a crisis of confidence, that might have been enough to topple SVB UK, even if all of its fundamentals were OK.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#29Earlier 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.
The announcement from Treasury, the Fed, and the FDIC was that depositors would be made whole and that there would be an assessment on banks to cover it. As such, I'd assume that there was no buyer.
https://home.treasury.gov/news/press-releases/jy1337
> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer... Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
While they say "no losses will be borne by the taxpayer", making banks pay who will then pass along those costs to their customers seems like a roundabout way of taxpayers paying - or at least a substantial portion of taxpayers who are banking customers. Maybe banks won't be able to pass along the costs through increased fees or lower rates and will have to eat the costs.
Re: HSBC to Buy UK Arm of Silicon Valley Bank
#30Surprised Goldmans didn't buy them - and position it as Marcus for Startups.
sorry I was misinformed