Silicon Valley Bank UK (SVB UK) awarded millions of pounds in employee bonuses, just days after it was bailed out by global banking giant HSBC for just £1, according to unnamed sources.
In a Sky News on March 18 reports citing unnamed sources, it was reported that payments to SVB UK staff and senior executives were approved “earlier this week” by HSBC UK Bank, the institution that acquired SVB UK for 1 British pound ($1.22 USD) on March 13.
It was reportedly “unclear” how much had been awarded to SVB UK CEO Erin Platts “or her senior colleagues”, however sources described the bonus fund as “modest” and said it it totaled “between £15 million and £20 million”. (approximately $18.26 million and $24.35 million).
While insiders reportedly noted that if SVB UK “had not been acquired in a solvent manner”, the bonuses would not have been “paid out this week”, an insider reportedly “noted” that the shares held by top executives and other employees had “given up”. useless” for the near collapse of SVB UK.
Another source reportedly added that the bonus payments were “a sign of HSBC’s confidence in the talent base” in SVB UK, and was to honor “pre-agreed payments” in an effort to “retain key staff”. .
SVB UK previously stated in a March 17 tweet that it was “delighted” to now be part of HSBC, after 14 years of supporting and “growing the UK’s innovative economy”.
With 14 years of supporting and growing the UK innovation economy, @SVB_UK is delighted to now be a part of @HSBCjoining a successful global organization to drive growth for our clients and ourselves. #UKTech #SVBUK #Opening #HSBChttps://t.co/MNUl57S33Z
— SVB UK (@SVB_UK) March 16, 2023
This comes after the Bank of England. close operations from SVB UK on March 10, stating that it had a “limited presence” and had no “critical functions” in support of the financial system.
The statement stated that SVB UK will “stop making payments or accepting deposits” as the BoE intended to ask the court to place SVB in “Bank Insolvency Proceedings”.
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Meanwhile, SVB’s US banking arm became government owned and its holding company, SVB Financial Group, filed an application for Chapter 11 Bankruptcy Protection on March 17, as it searches for buyers for its other assets.
SVB Group restructuring director William Kosturos said the Chapter 11 process will allow SVB Financial Group to “preserve value while evaluating strategic alternatives for its prized businesses and assets.”
Kosturos emphasized that SVB Capital and SVB Securities will continue to operate, led by their respective independent teams.
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