SVB’s UK arm issues 15M pounds in bonuses after symbolic bailout: Report

Sil­i­con Val­ley Bank UK (SVB UK) has grant­ed mil­lions of pounds in employ­ee bonus­es, just days after it was res­cued by glob­al bank­ing giant HSBC for just 1 British pound, accord­ing to unnamed sources.

In a March 18 Sky News report cit­ing unnamed sources, it was report­ed that pay­outs to SVB UK staff and senior exec­u­tives were signed off “ear­li­er this week” by HSBC UK Bank — the insti­tu­tion which acquired SVB UK for 1 British pound ($1.22) on March 13.

It was report­ed­ly “unclear” how much had been award­ed to SVB UK’s CEO, Erin Platts, “or her senior col­leagues,” how­ev­er, the sources described the bonus pool as “mod­est” and said that it totaled “between £15m and £20m” (approx­i­mate­ly $18.26 mil­lion and $24.35 million).

While the insid­ers report­ed­ly not­ed that if SVB UK had “not been acquired sol­vent­ly,” the bonus­es wouldn’t have “been paid this week.” One insid­er report­ed­ly “point­ed out” that the stock 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 were to hon­or “pre­vi­ous 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 & grow­ing the UK’s inno­va­tion econ­o­my, @SVB_UK is delight­ed to now be part of @HSBC, join­ing a suc­cess­ful glob­al organ­i­sa­tion to fuel our clien­t’s growth and ours. #UKTech #SVBUK #Star­tups #HSBChttps://t.co/MNUl57S33Z

— SVB UK (@SVB_UK) March 16, 2023

This comes after the Bank of Eng­land (BoE) shut down the oper­a­tions of SVB UK on March 10, stat­ing that it had a “lim­it­ed pres­ence” and no “crit­i­cal func­tions” sup­port­ing the finan­cial system.

The state­ment declared that SVB UK would “stop mak­ing pay­ments or accept­ing deposits,” as the BoE intend­ed to apply to the court to place SVB into a “bank insol­ven­cy procedure.”

Mean­while, SVB’s Unit­ed States bank­ing arm has been tak­en into gov­ern­ment own­er­ship. Its hold­ing 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 its prized busi­ness­es and assets.”

Kos­tur­os empha­sized that SVB Cap­i­tal and SVB Secu­ri­ties will con­tin­ue to oper­ate, led by their respec­tive inde­pen­dent teams.