HSBC announced on Tuesday that its annual bonus pool has been cut by 4% to $3.4bn (€3.19bn), as the global economic slump has caused a decrease in awards for its bankers.
Despite this, the bank’s Chief Executive Noel Quinn has seen his pay package jump 14% to £5.6m (€6.31m).
In addition to this, the bank has considered a special payout after the sale of its Canadian unit, as well as a potential special dividend of $0.21 after the completion of the unit sale.
This is in response to a campaign from its largest shareholder, Ping An Insurance Group Co of China, to pursue a wider break-up of the business.
Reporting results that beat analyst estimates, HSBC has seen its adjusted pretax profit rise 92% to $6.83bn (€6.4bn). The lender has also benefited from rising interest rates, with its net interest margin rising to 1.74% in the quarter, up from 1.19% a year earlier.
In order to provide a higher return for shareholders, the bank has announced that it will resume paying quarterly dividends from the first quarter of this year and will look at other potential buybacks in addition to any existing program.
Cost pressures remain a key issue for the bank, and rising inflation may force the lender to significantly increase salaries and make “brutal” cuts to keep a lid on costs.
The bank’s costs rose 2% in the period due to technology spending and performance-related pay.
Despite this, HSBC is in the midst of an overhaul of its global operations, and is looking to develop its operations in some of Asia’s biggest markets. In particular, the bank is focusing on building up its Indian unit and plans to open an onshore private banking service for the country’s wealthiest citizens this year.
The bank is also looking to head off a campaign by Ping An Insurance Group Co., the company’s largest shareholder, to force it to consider a spin-out and separate listing of its Asian operations.
HSBC’s results are the first under new Chief Financial Officer Georges Elhedery, who took over from Ewen Stevenson at the start of the year.