Silicon Valley Bank’s branch in the United Kingdom has provided millions in bonuses for its employees hours after receiving a lifeline from HSBC, Sky News reported on Friday, citing anonymous sources.
HSBC bought the embattled bank for just one pound sterling, the banking giant announced last week.
According to the report, HSBC approved payments to SVB UK employees and executives, with teams receiving bonuses with the funds.
Sources speaking to Sky News added staff provided undisclosed payments to its chief executive, Erin Platts, but funds were “modest” and between “£15 million and £20 million.”
Further sources added that the banking crisis had wiped out the values of senior executive stocks. Additional insiders revealed that the bonuses had been a “signal of HSBC’s confidence in the talent base” and aimed to “retain key staff” from SVB UK.
Ongoing Banking Collapse
The news comes amid the ongoing aftermath of the Silicon Valley Bank Group’s collapse into Chapter 11 bankruptcy in the United States. It did not receive protection for SVB Capital and SV Securities.
The US wing aims to preserve its value amid the bankruptcy proceedings, it said in a recent statement.
SVB has long provided financial backing for venture capital firms, startups, and other key investors in the emerging technologies space. Its collapse has sent ripples across the tech industry and triggered massive instability in global markets.
The Bank of England also shuttered SVB UK’s operations last week, ordering the bank to “stop making payments or accepting funds” due to its insolvency protocols.
Shareholders of SVB Financial Group also sued executives and the defunct bank for allegedly defrauding investors about interest rates. The lawsuit accuses three of the groups involved of withholding information about the knock-on effects of rising interest rates leading up to the bank runs.
