HSBC CEO nearly doubles pay despite fall in fourth-quarter profits

HSBC CEO nearly doubles pay despite fall in fourth-quarter profits

HSBC, the UK’s largest bank, has reported a record-high year of profits and revenues, but has also faced a surprise drop in its fourth-quarter earnings, which took a hit from its exposure to China’s real estate slump. The bank said its pre-tax profit surged by nearly 80% to top $30.3 billion (£24 billion) in 2023, from $17. billion dollars (£13.6 billion) the year prior. The jump was helped by higher interest rates which have pushed up the cost of borrowing, driving bigger earnings for the UK’s largest lenders1. The bank also revealed in its annual report that the pay package for chief executive Noel Quinn nearly doubled last year. He took home £10.6 million, up from £5.6 million in 2022, primarily thanks to a £5 million long-term bonus in HSBC shares that he gained during the year. Bankers for HSBC also shared bonuses worth $3.8 billion (£3 billion), surging by 12% compared with the previous year.



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However, HSBC revealed that its earnings were knocked in recent months because of problems facing China, the world’s second-largest economy. The majority of the bank’s profits are generated in Asia, although its global headquarters are in London1. Its pre-tax profit plunged by $4.1 billion (£3.3 billion) to $1 billion (£800 million) in the final three months of the year, compared with the same period the year before. The fall was driven by a $3 billion charge linked to HSBC’s stake in Bank of Communications, a Chinese bank. Lenders in China have faced a sharp downturn in the country’s commercial real estate market, which has left many developers with mounting debts.

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Shares in HSBC tumbled by about 7% on Wednesday morning following the surprise fourth-quarter hit1. But Mr Quinn said the bank remains “confident on the economy in China” and the fact that leaders are working to stimulate the economy. “I did say last quarter, I thought the market had bottomed. I still believe that,” he told reporters on Wednesday. “I also said last quarter that it would take a few years for the market to work its way through the current challenges – so I didn’t say challenges were over.” He said there has been a “progressive and gradual recovery” in the real estate market

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