The UK subsidiary of Silicon Valley bank made more than $18m in bonuses this week – just days after HSBC stepped in as part of a bailout deal to save the institution from bankruptcy.
Payments to staff, including senior executives, were given the green light earlier this week by HSBC, the new owner of SVB UK, Sky News mentioned. HSBC bought the British arm of the American bank for one British pound in a deal facilitated by the Bank of England after its parent company collapsed in a social media-fueled bank stampede.
The bonus pool has been described as “modest”, ranging from $18m to $24m, sources told Sky News.
Insiders said that had SVB UK not been solvent at the time of the takeover, the bonuses would not have been paid.
SVB employees in the US were also reported to have received annual bonuses, just hours before the bank collapsed on March 10.
Federal regulators last week shut down SVB Bank, once the 16th-largest US bank Santa Clara, a California-based institution, after the financial institution ran into a run-down. The crash came shortly after SVB revealed it had lost $1.8 billion in sales of its bonds, which sparked fears among clients that they would not be able to withdraw their money.
SBV Financial Group, the parent company of the failed Silicon Valley bank, filed for Chapter 11 bankruptcy protection on Friday.
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