HSBC pays £2.6bn in staff bonuses as profits double
HSBC staff will receive £2.6billion in bonuses – the highest level since 2014 – after profits more than doubled to £13.9billion last year.
The global banking giant said its fortunes soared thanks to strong insurance and mortgage sales. All of the regions it operates in were profitable, particularly its UK arm.
The bank also benefited from lower-than-expected coronavirus losses on loans to businesses and individuals.
It meant it could release more than £660million of rainy day funds it had set aside.
As a result, HSBC increased the size of its bonus pool for 2021 by 31.4 per cent to £2.6billion.
HSBC group remuneration committee chair Pauline van der Meer Mohr explained that by having previously cut 2020 bonuses by 20 per cent, it has increased payouts to stop talented staff from being poached or quitting.
She said: “We took into account the operating environment and the challenges created by a very competitive market for talent manifesting through higher-than-normal voluntary attrition rates.”
Thanks to surging profits, HSBC said it will follow up its £1.5billion share buyback scheme with another.
It will return £740million to investors by purchasing shares from the market and cancelling them, in order to boost the value of the remaining ones in circulation.
HSBC group chairman Mark Tucker said that despite the increase in tensions across Asia, where it makes most of its money, he believes that nations will opt for profitable peace, rather than conflict.
He said: “We remain alive to the potential impact that geopolitics can have on our business, as well as on our clients.
“The relationship between the US and China remains a prominent feature of the external environment.
“But we do not currently expect it to change significantly in the near future.
“We also expect the mutual economic benefits brought by the UK-China relationship to outweigh any shortterm pressures.”
HSBC also increased its dividend from 11p per share to 18.4p, a payout worth £5.1billion to its shareholders.