HSBC has come under fire after it was revealed that Silicon Valley Bank's UK arm, which was recently acquired by the bank, handed out over 15 million pounds ($18 million) in bonuses to staff including senior executives just days after its rescue deal.
According to a report by Sky News, the payouts were signed off by HSBC earlier in the week and would not have been paid if SVB UK had not been acquired while still solvent. The bonus pool was described as "modest" by sources familiar with the matter, ranging from 15 million to 20 million pounds.
However, the timing of the payments has raised questions about HSBC's priorities and the appropriateness of rewarding staff for their performance during a time of significant upheaval for the bank.
Critics have argued that the payouts are particularly egregious given that parent company SVB Financial Group filed for a court-supervised reorganization under Chapter 11 bankruptcy proceedings just days after the takeover of Silicon Valley Bank. The move was aimed at seeking buyers for its assets and came after the former unit was taken over by U.S. regulators.
Some experts have suggested that the bonus payments may have been intended as a way to retain key staff at Silicon Valley Bank UK following the acquisition by HSBC. However, others have argued that such payouts are simply not justified given the current economic climate and the challenges faced by the banking sector.
HSBC has yet to comment on the matter, while SVB UK has not responded to a request for comment from Reuters. The controversy surrounding the bonus payments is likely to continue, however, as critics call for greater accountability and transparency from banks and other financial institutions.