Silicon Valley Bank’s UK subsidiary doled out over $18 million in bonuses this week—just days after HSBC swooped in as part of a rescue deal to save the institution from insolvency.
Payouts to staff, which included senior executives, were given the green light earlier this week by HSBC, SVB UK’s new owner, Sky News reported. HSBC purchased the American bank’s British arm for 1 British pound in a deal facilitated by the Bank of England after its parent company collapsed in a social-media fueled bank run.
The bonus pool was described as “modest,” ranging from $18 million to $24 million, sources told Sky News.
Insiders said that had SVB UK not been solvent at the time of the acquisition, the bonuses would not have been paid.
SVB staff in the United States also reportedly received annual bonuses, just hours before the bank collapsed on March 10.
Federal regulators last week shut down SVB, previously the 16th-largest bank in the US Santa Clara, Calif.-based institution, after the financial institution suffered a run. The meltdown came shortly after SVB revealed a $1.8 billion loss on sales of its bonds, which spooked customers into worrying that they wouldn’t 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.