HSBC has reached a last-minute agreement to purchase the bankrupt Silicon Valley Bank UK, avoiding a crisis that could have caused chaos in Britain's tech sector.

After discussions over the weekend between start-up representatives, the Treasury and lenders, SVB UK will be bought by the British bank HSBC for £1.

The bank had deposits of approximately £6.7bn and loans of about £5.5bn and made a profit of £88m last year.

It stated that the Bank of England had made the decision to sell Silicon Valley Bank UK Limited (the UK subsidiary of the US bank) to HSBC UK Bank Plc after consulting with the Prudential Regulation Authority, HM Treasury and the Financial Conduct Authority.

This action was taken to stabilise SVB UK, ensuring continuity of banking services, minimising disruption in the UK technology sector, and supporting confidence within the financial system.

HMT and the Bank can confirm that all SVB UK depositors' funds are safe and secure due to this transaction. SVB UK will continue to operate the business of SVB UK as usual. Customers should not notice any changes to their services.

SVB UK collapsed over the weekend, after a bank run on its US branch made it economically unviable, and the Bank of England seizing control over the bank.

This failure could have caused doom for thousands of British investors and tech companies that rely on SVB UK, a bank that focuses on start-ups.

Over the weekend, Mr Hunt and Treasury officials held crunch talks with industry representatives and sought to find a buyer. HSBC and Oaknorth were among potential bidders. Sources indicated that HSBC was the most stable and secure candidate.

Putting the bank into insolvency without a buyer could have led to the threat of start-ups having their deposits frozen, which could have a negative impact on their ability to pay suppliers or staff.

Jeremy Hunt, the Chancellor said that the UK's tech sector was truly world-leading, and is of great importance to the British economy. It supports hundreds of thousands of jobs. Yesterday, I promised that we would take care of our tech sector. We have been working hard to fulfill that promise and find a solution for SVB UK's customers.

"Today, the Bank of England and the Government have enabled a private sale of Silicon Valley Bank UK. This ensures that customer deposits are safe and customers can bank as usual without taxpayer support. We are pleased to have achieved a quick resolution".

"HSBC is Europe’s largest bank. SVB UK customers should be reassured by the strength and safety it brings."

Noel Quinn, HSBC's chief executive, stated that "this acquisition makes excellent strategic sense to our business in the UK. It will strengthen our commercial banking franchise, and improve our ability to service innovative and fast-growing companies, both in the UK as well as internationally, in the technology, life-science, and life-sciences sectors.

"We are pleased to welcome SVB UK customers to HSBC. We look forward to supporting them in the UK as well as around the globe. Customers of SVB UK can bank as normal, knowing that their deposits will be backed by HSBC. We are delighted to welcome SVB UK colleagues into HSBC.