Proactive Investors - Shore Capital has concluded that HSBC Holdings PLC's acquisition of the UK assets of Silicon Valley Bank (SVB) should result in a "reasonable gain".
HSBC paid a nominal £1 for the business, with the exception of SVB UK's insolvent parent company.
According to Shore analyst Gary Greenwood, the acquisition will give HSBC access to new customers in a fast-growing market on attractive financial terms.
The deal also protects depositors, who will now be part of a larger and more stable bank, and helps the UK regulator execute a swift resolution, thus reducing further risks to financial stability.
HSBC's Chief Executive, Noel Quinn, has stated that the acquisition of SVB UK makes "excellent strategic sense".
HSBC's shares were down 4.8% in mid-afternoon trade, along with the rest of the UK financial sector, amid concerns over the health of two other US lenders - Western Alliance and First Republic.
Shore believes that HSBC shares, currently trading at 564p, are worth 740p.