HSBC bank profits more than doubled in 2010

Banking giant HSBC revealed its annual profits more than doubled today as its results recover to levels not seen since before the financial crisis.





The group posted pre-tax profits of 19 billion US dollars (£12 billion) last year, up from 7.1 billion dollars (£4.4 billion) in 2009.



Its 2010 haul - the biggest of the UK players - marks a return to pre-crisis profits, coming close to the 24.2 billion dollars (£15 billion) seen in 2007.



HSBC revealed its highest paid banker, who was not named, was paid between £8.4 million and £8.5 million for 2010 - more than the chief executive's package.



The bank said the compensation ratio of its Global Banking and Markets (GBM) investment banking division - given as a percentage of revenues - remained unchanged at 23%, despite a 9% drop in the division's profits.



However, HSBC said its GBM global bonus pool was down 10% and added UK bonuses were 15% lower, although it did not provide figures.



New chief executive Stuart Gulliver - former head of the investment bank - was awarded a £5.2 million bonus for 2010, which he will take in deferred shares, taking his total package for the year to £6.2 million.



The bank's former boss Michael Geoghegan - who stepped down as chief executive on December 31 - picked up a £3.8 million bonus and a total package of £5.8 million for the year.



He will continue to work for the group until he retires on March 31, landing more than £1.4 million in pay and pension this year.



Mr Geoghegan is also entitled to £200,000 for three months' consultancy work after he retires, although he will donate this to charity.



Despite the hefty rise in profits last year, shares fell 5% as the figure came in shy of the 20 billion dollars (£12.3 billion) expected.



Investors were also disappointed at HSBC's move to cut its profitability targets due to the cost of tougher global banking regulations.



Mr Gulliver reduced the bank's long-term return on equity target to 12-15% from a previous 15-19% goal.



It will cut costs to offset tough markets in countries such as the UK, where demand remains constrained and interest rates at historically low levels.



Mr Gulliver said he will outline more details in a strategy review scheduled for May.



HSBC is the last of the major UK banks to report in this year's earnings season.



As with many of its rivals, the group's figures were helped by significant falls in bad debt losses, almost halving to 14 billion dollars (£8.6 billion) in 2010.



But HSBC's new chairman Douglas Flint said the group will "not forget" the financial crisis and support provided by governments around the world, adding the group entered 2011 "with humility".



In the UK, profits edged higher to 2.4 billion dollars (£1.5 billion) from 2.1 billion (£1.3 billion) a year earlier.



On corporation tax, which has been in the public eye after Barclays revealed recently it paid just £113 million in 2009, HSBC said it paid 750 million dollars in the UK (£463 million) last year.



The group said this was 27% of UK taxable profits.



HSBC - which has a heavy focus on emerging markets - saw profits growth driven by Hong Kong and Asia Pacific last year.



On an underlying basis, HSBC said group-wide profits rose 36% to 18.4 billion dollars (£11.4 billion).



Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said HSBC's "performance and guidance have fallen short of investor expectations".



While he said the bank remains well placed thanks to its scale geographic spread, he added: "The shares may be suffering from failing to have met high expectations, something which has been a factor of their performance over the last year - a gain of just 0.2% as compared to a wider FTSE 100 appreciation of 12%."



HSBC's disclosure on pay today was the most detailed of its peers as it seeks to meet new standards under the Project Merlin deal struck with the Government, as well as Hong Kong rules.



It said of its top five earners - which includes two executives, Mr Gulliver and Mr Geoghegan - three bankers were paid up to £6.4 million, one up to £6.9 million and another up to £8.5 million.



The group also revealed the bonus details for its key staff, with 186 UK employees sharing a windfall pot of 172.4 million US dollars (£107 million) for 2010.



Salaries for the 186 employees, which include senior management and those in important roles as defined by the City regulator, was 55.3 million US dollars (£34 million) last year.



HSBC also used today's results as an opportunity to hit out at the impact of the UK's new banking levy on international banking groups.



The levy, introduced in January, would have seen HSBC pay around £600 million dollars (£370 million) if it was in place last year, according to HSBC.



Of this, its overseas business would have accounted for the bulk of its annual charge, with just a third coming from the UK.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there