According to a recent report, Silicon Valley Bank UK (SVB UK) gave millions of pounds in bonuses to employees just days after global banking giant HSBC bailed it out for just £1.
According to Sky News on March 18, citing unnamed sources, payments to staff and senior management of SVB UK were signed “earlier this week” by UK-based HSBC, the institution that purchased SVB UK in March for 1 British pound (US$1.22). ).13.
It was reportedly “unclear” how much was awarded to SVB UK CEO Erin Platts “or her senior colleagues”, however sources called the bonus fund “modest” and said it was “between £15m and £20m”. “.
While insiders reportedly noted that had SVB UK “not been acquired in a solvent manner” the bonuses would not have been “paid out this week”, one insider reportedly “pointed out” that the shares which owned by senior executives and other employees were “transferred useless” due to the near collapse of SVB UK.
Another insider reportedly added that the bonus payouts were “a signal of HSBC’s confidence in the talent pool” at SVB UK and were to make “previously agreed payouts” in an attempt to “retain key personnel”.
SVB UK previously stated in a March 17 tweet that it was “delighted” to be part of HSBC after 14 years of support and “the growth of the UK’s innovative economy”.
This comes after the Bank of England shut down SVB UK’s operations on March 10, saying it had a “limited footprint” and no “critical functions” to support the financial system.
The statement said SVB UK would “stop making payments or accepting deposits” as the Bank of England intended to go to court to include SVB in “bank bankruptcy proceedings”.
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Meanwhile, SVB’s US banking arm has been taken over by the state, and its holding company, SVB Financial Group, filed for Chapter 11 bankruptcy protection on March 17 as it seeks buyers for its other assets.
SVB Group’s chief restructuring director, William Kosturos, said the Chapter 11 process will allow SVB Financial Group to “preserve value as it evaluates strategic alternatives for its valuable businesses and assets.”
Kosturos stressed that SVB Capital and SVB Securities will continue to operate under their independent teams.
