The Bank of England has confirmed today that HSBC UK will buy Silicon Valley Bank's (SVB) UK unit in an attempted rescue deal.

The central bank said the action had been taken to stabilise Silicon Valley Bank UK Limited's banking services after news broke over the weekend of the collapse of the California-based bank.

Jeremy Hunt, UK chancellor 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."

SVB Financial Group is the largest banking failure since the 2008 financial crisis, according to Reuters reports. The failure unfolded on Friday when California bank regulators closed the bank, which did business as Silicon Valley Bank. 

The start-up and fintech-focused bank started selling its bonds last week at steep losses due to cash shortage, which led ultimately to a run on the bank. 

HSBC bought the UK arm of SVB for £1. The sale was facilitated by the BoE and protects the depositors and secures the start-ups' future.  

Srijan Katyal, Global Head of Strategy & Trading Services at Abu Dhabi-based financial services firm ADSS, told Zawya on Monday: “The news for the UK arm not only secures the future of a large number of starts-ups, it also highlights the strong alliance of the UK and US despite the repercussions of the Ukraine war.

"With both governments on either side heavily involved, this has provided security to over 3,000 customers with $8.1 billion in deposits. HSBC, with its $2.9 trillion in assets, outstripped the rescue bid from the Bank of London, meaning it should be a safer bet given the uncertainties that may arise with the deal.”

Boursa Kuwait-listed institutions confirmed exposure to SVB on Monday. Kuwait Finance House (KFH) said in a bourse filing that it had $1.242 million of exposure, and National Bank of Kuwait (NBK) confirmed $4.9 million off balance sheet exposure in aggregate. 

(Writing by Imogen Lillywhite; editing by Seban Scaria)