| 6.1°C Belfast

HSBC profits surge past £13bn, but shares slump as City expects more

BANKING giant HSBC announced that it racked up profits of nearly £14bn for trading in 2013.

But shares in the Asia-focused group slumped by more than 4% after the haul of $22.56bn (£13.6bn) – an increase of 9% on a year earlier – came in well below City expectations.

The banking group, which has more than 250,000 staff, said its chief executive, Stuart Gulliver, was awarded a total pay package worth just over £8m for 2013.

HSBC said Mr Gulliver's base salary will remain at £1.25m for this year but that he will receive a fixed pay allowance of £1.7m, to be awarded in shares on a quarterly basis.

It will not be tied directly to performance and so would not count as a bonus under new European rules preventing bankers from being paid bonuses worth more than two times their salary.

The controversial new rules from Brussels came into effect in January, meaning that 2013 was the last year in which big bonuses could be paid.

Mr Gulliver's previous pay scheme offered an annual bonus worth up to three times his salary, plus a longer-term share award that pays out as much as six times salary.

Mr Gulliver took the helm in 2011 and has led an extensive overhaul of the business.

He said HSBC was "leaner and simpler" as a result of the company's three-year turnaround plan.

Initiatives included the sale of 63 non-core businesses and a 41,000 reduction in its full-time headcount from 295,000 at the start of 2011.

However, he admitted that HSBC had not met all of its targets in 2013, with its cost efficiency ratio of 59.6% and return on equity of 9.2% both outside its target ranges, in part due to continuing customer compensation costs in the UK.

Please log in or register with belfasttelegraph.co.uk for free access to this article.

Already have an account?

Belfast Telegraph