Silicon Valley Bank's UK unit has been sold to HSBC for $1.21

• Silicon Valley Bank's UK unit has been sold to HSBC for 1 British pound, or $1.21.
• The UK government and the Bank of England facilitated the private sale, Chancellor Jeremy Hunt said.

HSBC has acquired Silicon Valley Bank's UK unit for 1 British pound, or $1.21, according to a statement from the bank Monday.

The UK government and the Bank of England facilitated the private sale, British Chancellor Jeremy Hunt said on Twitter.

"Deposits will be protected, with no taxpayer support," Hunt said.

"This acquisition makes excellent strategic sense for our business in the UK," HSBC CEO Noel Quinn said in the bank's statement. Silicon Valley Bank's UK unit tangible equity is expected to be around 1.4 billion pounds.

The acquisition of Silicon Valley Bank's UK unit came after the Bank of England said Friday it would place the subsidiary into insolvency procedure. The UK central bank added at the time Silicon Valley Bank's UK unit "has a limited presence in the UK and no critical functions supporting the financial system."

Silicon Valley Bank's UK branch is a standalone entity with its own balance sheet and governance structure, per Erin Platts, the bank's UK CEO and head of Europe, Middle East, and Africa.

Silicon Valley Bank UK had 5.5 billion pounds of loans and 6.7 billion pounds of deposits as of March 10, 2023, per HSBC. It recorded a profit before tax of 88 million pounds in 2022.

The developments across the Atlantic followed the closure of the bank's California-based parent by regulators on Friday. It has since been taken over by the Federal Deposit Insurance Corporation (FDIC). Share prices of SVB Financial Group, the bank's holding company, had collapsed following a failed $2.3 billion capital raise.