Profits of £13.8bn make HSBC top bank in the West

HSBC yesterday reported the largest profit made by any bank in the Western world in 2011 with a 15 per cent rise to $21.9bn (£13.8bn).

Its nearest rival is JP Morgan, which made £12bn last year.

But Stuart Gulliver, HSBC's chief executive, saw his pay and bonus cut from £8.35m to £7.16m after HSBC was hit by a £269m charge for mis-selling payment protection insurance and £39.8m in fines and compensation for mis-selling long-term care plans to the elderly. Perks and allowance pushed his total 2011 package just over £8m.

HSBC, which did not receive a UK state bailout and makes 90 per cent of its money outside this country, paid 170 bankers more than $1m last year.

The bank could push back even further its decision on whether to move its headquarters from London to Hong Kong. It has already put its usual triennial review on hold until 2013 and that could now be pushed into 2014.

Iain Mackay, the finance director, said: "UK legislation based on the Independent Commission on Banking looks more likely to happen in 2013 than 2012 now, and that is also the year we will get a new Governor of the Bank of England which will effect the thinking. So a decision is some way away."

Mr Gulliver, pictured, said the bank had seen particularly strong growth from emerging markets, including mainland China, Hong Kong, Brazil and Argentina in the first half of last year. He said he expected to see further strong growth in Asia, Latin America and the Middle East "although at a more moderate pace than in 2011". "We ... are confident that GDP growth in emerging markets will be positive and China will have a soft landing," Mr Gulliver said.

Since he took over as chief executive last year, HSBC has sold 19 non-core operations, including two major businesses in the US. It has already achieved costs savings of $900m a year and is on target, Mr Gulliver said, to save between $2.5bn and $3.5bn a year by 2013.

Profits at HSBC's investment bank fell 24 per cent to $7bn as, like its rivals, it was hit by the turbulence in financial markets during the eurozone crisis. UK high street profits advanced 17 per cent to £1.55bn, mainly on lower bad debt write-offs.

Dividends for the year have been increased by 14 per cent to 41 cents a share. That took the total dividend payout to £3.8bn, the third largest for 2011 of any FTSE 100 company.

The world's most profitable banks are China's ICBC, which made $32bn in 2010, and China Construction Bank, which made $26.4bn.