The UK arm of collapsed Silicon Valley Bank (SVB) has been sold to HSBC in a hastily-arranged rescue deal.

The Treasury said in a statement on Monday that SVB customers will be able to access their deposits and banking services as normal.

It is a welcome development for the UK tech sector, which will have spent the weekend bracing itself for potentially more bad news in the wake of Friday’s bank run, which led to the US Federal Deposit Insurance Corporation (FDIC) shutting down SVB and putting it – and by extension its UK operation – into receivership.

The collapse set off a flurry activity on this side of the pond, with the Treasury on Sunday saying it was working “at pace on a solution to avoid or minimise damage” to the UK tech sector. That fervent effort seems to have paid off.

“The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs,” said chancellor of the exchequer Jeremy Hunt, in a statement on Monday. “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.”

Under the deal, which was brokered by the government and the Bank of England, HSBC UK will acquire SVB UK for the token sum of £1. HSBC said in a statement that as of 10 March, SVB UK had loans totalling approximately £5.5 billion, and deposits of around £6.7 billion. Last year, it recorded a pre-tax profit of £88 million. SVB’s tangible equity is expected to be about £1.4 billion.

“This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally,” HSBC Group CEO Noel Quinn.

“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them,” he added.

Julian David, CEO of tech trade group techUK, said in a statement it had been “a hectic and very alarming weekend” for many working in the sector, particularly when there was uncertainty over the extent to which the US or UK governments would intervene to protect customers.

“‘Keep Calm and Carry On’ has often been a useful message but in this case for the tech sector it was a mistaken one. It failed to address the huge impact of the concentration in the tech startup and scaleup sector of the 3,000 or so clients SVB UK is reported to have and its role as not just an investor but as the primary bank for these companies,” he said. “Without access to their deposits these companies faced the prospect of not being able to pay staff or rent or suppliers – in short many would also be facing insolvency and the many thousands of people working in this part of the tech sector would be very worried about their jobs.”

Late on Sunday, the US tech sector also got some good news. In an effort to ward off potential runs on other banks, the FDIC unveiled measures to protect SVB customers’ entire deposits. Until now, the FDIC has only insured deposits up to $250,000, but it has since confirmed that both insured and uninsured deposits – as well as all SVB’s assets – will be transferred to what it calls a bridge bank, which will give customers full access to all of their money from Monday.

The same measures apply to Signature Bank, which was shut down on Sunday. The New York-based bank provided services to crypto companies, including major cryptocurrency exchanges. Its collapse came less than a week after the failure of another big crypto-focused bank, Silvergate. Both fell victim to the downturn in the crypto market, exacerbated by the spectacular collapse of crypto exchange FTX last November.

While these measures will protect smaller tech firms, the high-profile failure of not one but three tech-focused banks in such a short space of time will leave a cloud of uncertainty hanging over the entire sector.

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