HSBC bounces back from crisis with treble profits

The global group, which has its First Direct internet and phone-based bank in Leeds, said each of its regions returned to the black for the first time since 2006.

The bank revealed it paid bonuses to 186 key UK staff, including senior managers, worth a total £107m in 2010. This was on top of these higher earners’ salaries of £34m last year.

HSBC said its highest-paid banker, who was not named, beat its chief executive by earning between £8.4m and £8.5m in 2010.

HSBC also revealed new chief executive Stuart Gulliver – formerly head of its investment bank – was awarded a £5.2m bonus for 2010, taking his total package for the year to £6.2m. That compared with £9.8m in 2009.

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

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

The banking giant’s result marks a sharp rise on the $7.1bn (£4.6bn) posted in 2009 as it continues to benefit from lower bad debt losses. Impairment charges almost halved to $14.1bn (£8.6bn) as all its regions improved.

Its 2010 results – the biggest of the UK players – mark a return to pre-crisis profits, coming close to the £15bn seen in 2007.

HSBC avoided a Government bailout during the credit crunch but new chairman Douglas Flint said the group would “not forget” the financial crisis and support provided by governments around the world, adding the group entered 2011 “with humility”.

“Society has a right to ask if banks ‘get it’,” said Mr Flint. “At HSBC we do... But we also do not forget that value creation depends upon HSBC recruiting, training and retaining the right talent.”

The bank said the compensation ratio of its investment Global Banking and Markets banking division – given as a percentage of revenues – remained unchanged at 23 per cent for last year despite lower profits.

Its UK bank made pre-tax profits of £1.3bn, up 33 per cent. It has doubled the size of its mortgage book to £362bn since 2005.

HSBC said it paid £1.2bn in UK tax, almost as much as its UK profits and its 52,000-strong UK workforce paid another £673m in employee contributions.

Its profits dwarfed Lloyds Banking Group’s return to the black last week with profits of £2.2bn, and a sharp drop in losses to £1.13bn seen at Royal Bank of Scotland, and Barclays’ profits of £6.1bn.

But shares in the bank fell yesterday – by 33.1p to 678p – after the results disappointed and HSBC warned on costs and the impact of tough new rules on capital.