HSBC, one of the world's largest banks, has acquired the UK division of Silicon Valley Bank (SVB) for the nominal price of £1, following the bank's collapse last week. The deal has been approved by the Bank of England (BoE) and will safeguard UK firms with investments and deposits in SVB from any negative fallout from the bank's demise. According to reports, the takeover has been completed with immediate effect.

The acquisition has brought a sense of safety for clients of the California-based tech bank, with UK finance secretary Jeremy Hunt stating that the deal will protect some of the country's most important and strategic companies. HSBC CEO Noel Quinn has described the purchase as an "excellent strategic sense for our business in the UK".

HSBC holds assets worth nearly $3tn and is Europe's largest bank. SVB UK has a total balance sheet of around £8.8bn, with loans of £5.5bn and deposits of £6.7bn, according to HSBC.

While the bank's shares fell 3.8% on Monday following the acquisition news, HSBC fared better than other European banking stocks, which dropped by 6% after SVB's collapse. The acquisition has brought relief for market participants and UK tech firms with exposure to SVB, with several British startups revealing their exposure and the cash flow constraints generated by the bank's sudden failure.

Silicon Valley Bank was closed by California regulators on Friday, with the US Federal Deposit Insurance Corporation (FDIC) taking over the failed bank. This marked the largest bank failure in the United States since 2008.

The HSBC deal comes amidst FDIC efforts to find another bank that can merge with SVB to manage the crisis. If a deal is sealed by Monday, the unsecured deposits can be safeguarded. Another US bank, Signature Bank, has also bitten the dust following SVB's collapse and the adverse pressure it has created in the banking sector. Signature Bank had 38 private client offices located in New York, Connecticut, California, and North Carolina.

HSBC's acquisition of SVB UK has prevented any potential adverse fallout for UK companies with investments and deposits in SVB. The acquisition has brought reassurance to the tech-focused American bank's exposed clients and prevented some of the UK's most strategic companies from being wiped out. While HSBC's shares fell slightly following the news, it performed better than other European banking stocks. The acquisition has brought relief to market participants and UK tech firms that were exposed to SVB.