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They acquired a bunch of client assets for 1 GBP. Those client assets will generate money for them in the long term. For HSBC this is a great deal. For the clients too, come to think of it. On Friday the future of their money was uncertain, whereas today they can relax a bit because a big bank is backing them.
Assuming of course clients don't fucking pull out the moment they can when svb uk reopens.
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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.
HSBC just restructured, I've been an HSBC US customer for 10 years including business banking, they're not going anywhere, just only serving high net worth and business now. I agree it would have been nice if they bought SVB, they'v been great for me with my startups, they're really good at business banking.
Article isn’t super clear; is HSBC filling the gap?
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If the BoE took them over and HSBC bought them for £1 you can be sure that those numbers do not reflect the current situation.
Oddly, it had been reported that the bidding process for the bank was 'competitive' and that there were several interested parties. I can't see how that could have been true if the final price was a token £1 ?
Wasn'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.
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HSBC just restructured, I've been an HSBC US customer for 10 years including business banking, they're not going anywhere, just only serving high net worth and business now. I agree it would have been nice if they bought SVB, they'v been great for me with my startups, they're really good at business banking.
I've also been an HSBC US customer for like 6-7 years, and quite happy with them. They decided to keep me too haha.
Great play by HSBC. It's very interesting because some banks will make out very nicely in the comming weeks and some will be dragged down a lot by the general pull of the market. HSBC already found some "free money" right away. I think at least one of the big US banks will also print some money (I'd bet on JPM).
The US regulators really frown on the big banks snatching up failed bank assets. They allow it when they have to but the median regulator driven take over is done by banks in the same tier as the one acquired. I actually wonder if that’s why the uk arm of svb was able to be purchased but the US one wasn’t. It’s probably just the relative size differences but I’m curious if the fdic got no bids for svb or didn’t get a…
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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.
> It's said that no bank (even the best-managed) can withstand a fullscale bank run I keep reading this but this should not be true Any bank will hit liquidity issues on a full-on bank run, as not 100% of a banks assets will be marketable, but central banks will provide emergency liquidity in these situations But banks should not hit insolvency issues like SVB did
I don't think it should be up to the government to back these risks, because if banks think the government will always rescue them, they don't need to care as much about risky investments.
You could argue that it is depositor money, so they're not really saving the bank, they're saving customers. But if banks don't have to care about their risk profile, customers will deposit their money in whatever bank is offering the greatest interest rates, which will likely be those that are making the riskiest investments, which could lead to more bank failures with market swings.