Silicon Valley Bank’s UK subsidiary doled out over $18 million in bonuses this week—just days after HSBC swooped in as a part of a rescue deal to avoid wasting the institution from insolvency.
Payouts to staff, which included senior executives, got the green light earlier this week by HSBC, SVB UK’s recent owner, Sky News reported. HSBC purchased the American bank’s British arm for 1 British pound 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,” starting from $18 million to $24 million, sources told Sky News.
Insiders said that had SVB UK not been solvent on the time of the acquisition, the bonuses wouldn’t have been paid.
SVB staff in the US also reportedly received annual bonuses, just hours before the bank collapsed on March 10.
Insiders said the staff bonuses wouldn’t have been doled out if the bank had not been solvent when it was acquired. AP
Federal regulators last week shut down SVB, previously the Sixteenth-largest bank within the US Santa Clara, Calif.-based institution, after the financial institution suffered a run. The meltdown got here shortly after SVB revealed a $1.8 billion loss on sales of its bonds, which spooked customers into worrying that they wouldn’t have the opportunity to withdraw their funds.
SBV Financial Group, the parent company of the failed Silicon Valley Bank, filed for Chapter 11 bankruptcy protection on Friday.
