The public messaging on Friday from SVB UK was that they were entirely ring-fenced, all is well etc. But behind the scenes they were going to the Bank of England asking for emergency funding. So by Saturday the wheels were turning on the insolvency processes. I guess the US media was focussed on the US side of things, in the UK there has been a lot of noise about lots of UK startups having money tied up in SVB UK and how things need to be done to sort the situation.
If HSBC bought it for £1 (which is a minimal amount in order to have a binding contract) it does not mean that the deal is too good to be true. It means that the company actually has a negative net value, i.e. more liabilities than assets, and of course HSBC will take those liabilities on.
It's a bit like if you want to buy a house that has a mortgage and the deal is that to buy the house you have to take the mortgage on as well. How much cash would you be willing to pay for that? Potentially 0 (i.e. taking the mortgage on is enough for you).
It's not a multi-billion company, it a bank that has billions of loans and deposits (assets and liabilities). Yes, its a profitable bank but on order of magitude lower scale:
> It also logged a pretax profit of £88 million ($106.5 million) in its last fiscal year ended December.
I'm not sure you understand what's happening here or the basics of business and liquidation.
"Normal companies can't go bankrupt in one day" - They didn't go bankrupt. They went into liquidation. Massively different thing. You can have a company with billions of quid saved up in the bank that goes into liquidation.
Liquidation is quite common and happens daily in the UK to 'normal' companies. Companies that were profitable last week and no longer can operate as they're not profitable enough to pay their debts/what they owe.
I think your issue here is you don't understand what liquidation is/means and basic principles of business profits. The most important part is that while a company may be profitable at the 'end of year' -- They have to first get to the end of the year.
Wholly owned subsidiaries can have their assets swallowed up by their parent companies debts. So the bad debt can effectively "trickle down" as the assets are liquidated and passed up the structure. By forcing a sale now the BoE prevents American creditors from leapfrogging British ones...
Yes but its parent/owning company had gone bust. Lehman Brothers UK arm was also solvent (I think they had roughly £8B of assets after everything was wound up and the administrators bills were paid) but had no cash after the parent company went bust.