HSBC Reports Record Bonus Pool Amid Major Job Cuts

HSBC has announced a record bonus pool of $3.93 billion, marking the largest sum awarded since 2011. This increase follows the bank realising better-than-expected profits, attributed to effective management strategies in a volatile economic environment.

Chief Executive Georges Elhedery, who earned £14.4 million last year, highlighted the bank’s shift towards a high-performance culture. This transformation aims to enhance talent recognition and reward performance among HSBC’s workforce of over 218,000 employees.

Despite the rise in bonuses, the bank is undergoing significant restructuring, which includes cutting around 15% of managing director roles. This initiative is part of a broader strategy to streamline operations and increase efficiencies. The job cuts are expected to generate annualised savings of $1.5 billion, with the restructuring completed six months ahead of schedule.

HSBC’s annual pre-tax profits reached $29.9 billion, supported by a robust performance in the face of rising interest rates. The bank has diversified its operations beyond traditional lending, focusing more on fee-based activities, including wealth management. Analysts have praised these moves, as they provide resilience against fluctuating market conditions.

In light of its expansion strategy, HSBC has secured full control of its Hong Kong-focused subsidiary, Hang Seng Bank, through a $13.7 billion deal. This acquisition is expected to yield significant synergies, benefiting the bank’s overall profitability in the coming years.

While the bonuses reflect a recovery in profit margins, the bank has also faced challenges, including litigation costs and fluctuations in investment valuations. Elhedery remains optimistic about the bank’s future, projecting a return on tangible equity of at least 17% over the next three years.