HSBA Hsbc Holdings Plc

By Paul Clarke

Of Financial News

HSBC Holdings PLC cut bonuses to its top investment bankers by 11% last year, but nearly doubled redundancy payouts for executives in the unit as the U.K. lender reshaped its business with deep job cuts.

The bank paid out $611.6 million to 541 senior investment bankers known as material risk takers, a top group of employees who influence the risk profile of the bank. The Bank of England has told U.K. lenders to show restraint on bonus payments for its senior staff this year as the Covid-19 crisis has hit the economy.

The average bonus payment for the bank's MRTs within its investment bank was around $497,000, the bank revealed in its annual accounts--a reduction of 11% on the $559,000 average paid to the group last year. Overall compensation remained flat at an average payment of around 1.1 million pounds ($1.5 million).

The number of people falling into this group of top investment bankers also fell by 7.5% as the bank unveiled plans to cut 35,000 jobs of part of a transformation program that will see the bank shift its business toward Asia.

HSBC's overall bonus pool dropped by 20% to $2.7 billion, with the payments skewed toward Asia as performance in the region outstripped other parts of the world.

HSBC awarded $36.6 million to 38 people within its investment bank in severance awards, up by 84% on the previous year. One banker leaving the firm received $7.3 million, whereas the highest such payment in 2019 was $3.1 million.

U.K. lenders' bonus payments are under increased scrutiny this year after regulators called for prudence, despite investment banking revenues surging. In March, the BOE told U.K. lenders to stop paying dividends and cash bonuses to their senior executives, including material risk takers. In a December update, the regulator said it expects banks to exercise a "high degree of caution and prudence" on variable compensation for 2020.

Barclays PLC increased average bonuses for senior executives in the unit housing its investment bank by 14% to around GBP636,000, Financial News reported. NatWest Group PLC paid GBP60 million to a handful of top employees in its sales and trading division, even as it posted a full-year loss for 2020.

HSBC also paid 1,149 people over 1 million euros ($1.2 million) during 2020, which was broadly in line with the previous year.

Website: www.fnlondon.com

(END) Dow Jones Newswires

February 23, 2021 04:51 ET (09:51 GMT)

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