HSBC boosts staff bonus pool by a third to £2.6bn as profits soar in Covid crisis

(qlmbusinessnews.com via theguardian.com – – Tue, 22nd Feb 2022) London, Uk – –

London-headquartered bank paid more than 450 of its staff €1m or more last year

HSBC boosted its banker bonus pool by nearly a third after a global recovery from the Covid crisis helped profits more than double last year.

The London-headquartered bank increased its staff bonus pool to $3.5bn (£2.6bn), a move it said was justified due to its strong financial performance and the need to compete for bankers in an “extraordinarily competitive labour market”.

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“It is critical for our long-term performance that we continue to attract and retain the talent necessary to deliver our strategic priorities,” HSBC said in its annual report on Tuesday.

The boost to bonuses came as the bank said it had paid its bankers 451 of its bankers €1m (£832,000) or more last year, marking a 40% increase on the number of staff with such payouts.

That list included 15 bankers earning more than €5m, including one unnamed banker who was handed €11-12m – nearly double the £4.9m paid to the HSBC chief executive, Noel Quinn.

Quinn’s pay increased by 18% after the cash bonus he waived during the first year of the Covid crisis in 2020 was reinstated.

It came as HSBC reported a surge in its annual pretax profits, which rose from $8.8bn to $19bn. The increase was primarily driven by improving economic conditions, which allowed it to release hundreds of millions of pounds originally set aside for a potential jump in loan defaults during the pandemic.

The bank released around $928m in loan loss provisions for the year. It is a significant improvement compared with the $8.8bn it was forced to put aside in fear of soured debts in 2020.

Quinn said the bank had ended the year on a high note, recording profits in all of its regional businesses including the UK. The lender will hand more cash back to shareholders as a result, including through a dividend worth 18 cents per share and a further share buyback of up to $1bn, following the conclusion of an existing $2bn buyback programme.

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However, despite the strong performance, Quinn said the bank’s leadership “remain cognisant of the potential impact that further Covid-19-related uncertainty and continued inflation might have on us and our clients”.

By Kalyeena Makortoff