Home » UK Business News » HSBC profits up by $1.5 billion after Silicon Valley Bank UK business buyout

HSBC profits up by $1.5 billion after Silicon Valley Bank UK business buyout

By Nagasunder in UK Business News, posted May 2, 2023

HSBC, Europe's largest bank, has reported a pre-tax profit of $12.9 billion for the first quarter of 2021, more than triple its profits for the same period last year.

The bank attributed a provisional gain of $1.5 billion to its acquisition of Silicon Valley Bank UK Limited, which it bought in March for a nominal £1.

Group chief executive Noel Quinn said to the BBC: "We remain focused on continuing to improve our performance and maintaining tight cost discipline, but we also saw an opportunity to invest in SVB UK to accelerate our growth plans,"

The bank also benefited from the reversal of its plan to write off $2.1 billion due to the sale of its French business, as the deal may not be completed.

HSBC has announced it will buy back $2 billion of its shares and pay its first quarterly dividend since before the pandemic.

However, the bank also warned that the completion of its sale of business in Canada is likely to be delayed.

The $10 billion sale, which was initially expected to be completed by the end of 2021, is now expected to be concluded in early 2022.

This delay is part of the bank's strategy to withdraw from slow-growing Western markets.

The global banking sector has been in a state of turmoil, with the collapse of Silicon Valley Bank and Signature Bank in March, as well as the forced buyout of rival Credit Suisse by Swiss banking giant UBS.

On Monday, US regulators seized First Republic Bank and sold its assets to Wall Street giant JPMorgan Chase, in an effort to resolve the biggest failure of a US bank since the 2008 global financial crisis.

HSBC's strong performance comes amid a difficult time for the banking sector, with many banks facing unprecedented challenges due to the pandemic and rapidly changing market conditions.

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Despite this, the bank remains focused on improving its performance and maintaining cost discipline.

With the acquisition of SVB UK and the reversal of its write-off plan, HSBC is well-positioned to continue its growth trajectory and navigate the complex landscape of the banking industry.

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