March 18, 2023 | 1:01 PM
Silicon Valley Bank’s UK subsidiary spent $18 million in employee bonuses after being bought by HSBC in a bailout deal.
Silicon Valley Bank’s UK subsidiary handed out more than $18 million in bonuses this week — just days after HSBC stepped in as part of a bailout deal to rescue the institution from insolvency.
Payouts to staff, including senior executives, were green-lit earlier this week by HSBC, the new owner of SVB UK, Sky News reported. HSBC bought the U.S. bank’s UK arm for £1 in a deal facilitated by the Bank of England after its parent company collapsed in a social media-fueled bank run.
The bonus pool was described as “modest”, ranging from $18 million to $24 million, sources told Sky News.
Insiders said that if SVB UK had not been solvent at the time of the acquisition, the bonuses would not have been paid.
SVB staff in the United States also reportedly received annual bonuses just hours before the bank collapsed on March 10.
Federal regulators last week closed SVB, formerly the 16th-largest US institution bank in Santa Clara, Calif., after the financial institution suffered a run. The collapse came shortly after SVB announced a $1.8 billion loss on the sale of its bonds, prompting customers to fear they wouldn’t be able to withdraw their funds.
SBV Financial Group, the parent company of bankrupt Silicon Valley Bank, filed for Chapter 11 bankruptcy protection on Friday.