HSBC Holdings plc announced that its UK ring-fenced subsidiary HSBC UK Bank plc is acquiring Silicon Valley Bank UK Limited (SVB UK) for £1.

The deal followed a dramatic weekend in which government ministers and bankers explored various options in their attempts to save the British tech start-up lender.

Meanwhile, US authorities launched emergency measures to shore up confidence in the US banking system after the failure of SVB threatened to cause a broader financial crisis.

US regulators also closed New York’s Signature Bank, a significant real estate and crypto lender.

US private bank First Republic Bank said it secured additional financing through JPMorgan Chase & Co, following a collapse in its share price.

US regulators said SVB’s customers will have access to all their deposits starting on Monday and set up a new facility to give banks access to emergency funds.

The US Federal Reserve also made it easier for banks to borrow from the central bank in emergencies.

The Federal Deposit Insurance Corporation (FDIC) took control of Signature Bank, which had $110 billion in assets and $82.6 billion in deposits at the end of last year.

The US Treasury Department and other bank regulators said in a joint statement that all of the depositors of Signature Bank and SVB will be made whole, and “no losses will be borne by the taxpayer.”

After the HSBC announcement was made, the UK central bank said the UK’s banking system was sound.

The Bank of England said: “No other UK banks are directly, materially affected by these actions, or by the resolution of SVBUK’s US parent bank. The wider UK banking system remains safe, sound, and well capitalised.”

UK finance minister Jeremy Hunt tweeted: “This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.

“Deposits will be protected, with no taxpayer support.

“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”

HSBC said that SVB UK had loans of about £5.5 billion and deposits of around £6.7 billion, as at March 10, 2023.

It said that for the financial year ending December 31, 2022, SVB UK recorded a profit before tax of £88 million.

SVB UK’s tangible equity is expected to be around £1.4 billion.

“Final calculation of the gain arising from the acquisition will be provided in due course,” said HSBC.

“The assets and liabilities of the parent companies of SVB UK are excluded from the transaction.

“The transaction completes immediately. The acquisition will be funded from existing resources.”

HSBC Group CEO Noel Quinn said: “This acquisition makes excellent strategic sense for our business in the UK.

“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.

“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world.

“SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.

“We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.”