HSBC 'set to pay £1.2bn in bonuses'

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HSBC chief Douglas Flint says the bank expects to pay out 1.2 billion pounds in bonuses

Banking giant HSBC expects to pay about two billion US dollars (£1.2 billion) in bonuses this year, its chairman has said.

Douglas Flint told a Treasury select committee that a decision about bonus payments would be made in the next week or two but he gave a rough estimate of the size of the “bonus pool” across the global business for the first time.

Following widespread criticism of bankers’ bonuses, Mr Flint also said that some investment bankers’ pay had been increased using 150 million US dollars (£93.1 million) that had been taken from the bonus pool.

HSBC was this year due to carry out a review of where its business should be based and Mr Flint could not rule out the possibility that it would move its headquarters from London to Asia.

The bank carried out such a review every three years and this time one of the factors it would consider would be Chancellor George Osborne’s £2.5 billion a year bank levy.

Other banks, including those that have been bailed out by the taxpayer, are in the process of deciding how much to pay their staff in bonuses in coming weeks.

Mr Flint said: “We have not yet determined how much it is going to be this year but it’s around two billion.

“We should remember that the bonus pot is there to incentivise people to deliver against the objectives they were set at the beginning of the year, not just about profit.”

He refused to say how many people in the bank were paid more than £1 million a year, but said he had no objection to disclosing the figure if the other banks also provided the same information.

He also pointed out that HSBC had paid the vast majority of its most senior staff in shares for the past couple of years, which helped to incentivise staff to avoid undue risk.

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