Silicon Valley Bank UK hands out $18m in bonuses after HSBC bailout

Business

By matthew sedacca

March 18, 2023 | 13:01

Silicon Valley Bank’s UK subsidiary dished out more than $18 million in bonuses this week, just days after HSBC swooped in as part of a bailout deal to save the institution from insolvency.

Payments to staff, which included senior executives, 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-fuelled bank run.

The bonus fund 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 takeover, the bonuses would not have been paid.

SVB staff in the United States reportedly also received annual bonuses, just hours before the bank collapsed on March 10.

Federal regulators last week shut down SVB, previously the Santa Clara, California-based institution’s 16th largest bank, after the financial institution suffered a run. The crash came shortly after SVB disclosed a $1.8 billion loss on its bond sales, spooking clients into worrying they would not be able to withdraw their funds.

SBV Financial Group, the parent company of the failed Silicon Valley Bank, filed for Chapter 11 bankruptcy protection on Friday.