Silicon Valley Bank UK (SVB UK) has been given millions of pounds in employee bonuses, just days after it was rescued by the global banking giant HSBC with only 1 British pound, according to an unnamed source.
In a Sky News report on March 18, citing an unnamed source, it was reported that the payments to SVB UK staff and senior executives were signed “earlier this week” by HSBC UK Bank – the institution that acquired SVB UK for 1 British pound ($1.22) on March 13.
It is said to be “unclear” how much was awarded to SVB UK CEO, Erin Platts, “or her senior colleagues,” However, the source described the bonus pool as “modest” and said the amount was “between £15m and £20m.” (approx. -about $18.26 million and $24.35 million).
While the insider reportedly noted that SVB UK “is not being bought solvent,” the bonus will not be “paid this week.” One insider reportedly “pointed out” that shares held by senior executives and other employees had been “rendered worthless” by SVB UK’s near-collapse.
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Another insider reportedly added that the bonus payments were “a signal of HSBC’s confidence in the talent base” at SVB UK and that they should honor “previously agreed payments” to “retain key staff.”
SVB UK previously stated in a tweet on March 17 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 & growing the UK’s innovation economy, @SVB_UK now happy to be a part of @HSBCjoin a successful global organization to drive growth for our clients and us. #UKTech #SVBUK #Start #HSBChttps://t.co/MNUl57S33Z
— SVB UK (@SVB_UK) March 16, 2023
This comes after the Bank of England (BoE) closed SVB’s UK operations on March 10, saying it had a “limited presence” and lacked “critical functions” supporting the financial system.
The statement said that SVB UK would “stop making payments or accepting deposits,” as the BoE intended to apply to the court to place SVB into “bank insolvency proceedings.”
Meanwhile, the United States banking arm of SVB has been taken into government ownership. Its parent 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 officer, William Kosturos, stated that the Chapter 11 process will allow SVB Financial Group to “preserve value as it evaluates strategic alternatives for valuable businesses and assets.”
Kosturos confirmed that SVB Capital and SVB Securities will continue to operate, led by their respective independent teams.