One point is that hsbc might not be acquiring all of the liabilities – they might mostly get customer deposits but not eg some unsecured loan or bond issue. Regulators could be ok with such an outcome because a bunch of businesses losing bank deposits may be seen as worse than a single company defaulting on its debt.
Another is that SVB UK could be solvent so long as they don’t have to sell assets at a loss. Being part of hsbc stops the assets needing to be sold at a loss. And a separate thing is that even if the assets net liabilities are negative, the customer relationships could be valuable enough to hsbc to counteract that. Hsbc get a load of growing companies whom they can try sell banking services to. That assumes customers don’t all flee, but I don’t think they would because there isn’t a particular reason to fear hsbc in the way there was for SVB.
I don’t know what the commenter meant about JPM printing money.
For sure that’s a reasonable possibility. But even if this in particular is -ve, I think it could still be a good deal for hsbc for the reasons given above and below.
They acquired a bunch of client assets for 1 GBP. Those client assets will generate money for them in the long term. For HSBC this is a great deal. For the clients too, come to think of it. On Friday the future of their money was uncertain, whereas today they can relax a bit because a big bank is backing them.
If you had deposits with SVB's UK arm before, congrats, you're now an HSBC customer.
There is a much lower chance HSBC experiences a bank run. Not to jinx it but the most likely outcome is that most customers are satisfied that HSBC is a well-capitalized bank and keep their money there, while HSBC gets to use their deposits and the bank's assets to sit comfy earning yield.
Another is that SVB UK could be solvent so long as they don’t have to sell assets at a loss. Being part of hsbc stops the assets needing to be sold at a loss. And a separate thing is that even if the assets net liabilities are negative, the customer relationships could be valuable enough to hsbc to counteract that. Hsbc get a load of growing companies whom they can try sell banking services to. That assumes customers don’t all flee, but I don’t think they would because there isn’t a particular reason to fear hsbc in the way there was for SVB.
I don’t know what the commenter meant about JPM printing money.