The government and Bank of England intervened to “promote” a private transaction, which led to HSBC purchasing the UK division of the defunct US lender Silicon Valley Bank.
The rescue deal comes with “no governmental support,” and customers have been promised that their deposits would be secured.
Following the £1 sale, customers will have regular access to financial services.
The second-largest bank failure in history raised concerns that it would trigger a banking crisis in the US and have a negative impact on the UK’s technology and life sciences industries.
Assuring SVB clients that they “should feel comforted,” Chancellor Jeremy Hunt confirmed the sale this morning.
In a statement, he said: ‘The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.
‘I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
‘Today the Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.
‘HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.’
The bank has stressed that all services will continue to operate as usual at SVB UK following the deal, with all staff remaining employed.
‘Customers can continue to contact SVB UK through the usual channels and borrowers should make any loan repayments to SVB UK as normal’, a statement said.
It added that the wider UK banking system ‘remains safe, sound, and well capitalised’.
SVB UK had around £6.7 billion of deposits and loans of about £5.5 billion as at Friday last week, while its balance sheet stood at £8.8 billion, according to the Bank of England.
But the ‘scale of the deterioration of liquidity and confidence means that, in the view of the Bank and the PRA, the position was not recoverable’.
It comes after the US government moved to halt a potential crisis amid fears that the factors that caused the Santa Clara, California-based bank to fail could spread.
Officials assured all depositors at the failed institution that they could access all their money quickly on Sunday.