March 18, 2023 | 1:01 p.m.
The UK subsidiary of Silicon Valley Bank has handed out $18 million in staff bonuses after it was taken over by HSBC in a bailout deal.
The UK subsidiary of Silicon Valley Bank handed out more than $18 million in bonuses this week, just days after HSBC stepped in as part of a bailout deal to save the institution from insolvency.
Payments to staff, which included senior managers, were given the green light earlier this week by HSBC, the new owner of SVB UK, Sky News reported. HSBC bought the UK arm of the US bank for £1 in a deal facilitated by the Bank of England after its parent company collapsed in a social media-fueled banking race.
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.
Last week, federal regulators shut down SVB, previously the 16th-largest bank in the U.S. institution based in Santa Clara, California, after the financial institution suffered a run. The collapse came shortly after SVB revealed a $1.8 billion loss on sales of its bonds, which scared customers into fearing they would not be able to withdraw their funds.
SBV Financial Group, the parent company of the bankrupt Silicon Valley Bank, filed for Chapter 11 bankruptcy on Friday.