HSBC set to beat banking rivals with £14bn 2011 profit

HSBC will announce profits of £14 billion tomorrow for 2011, easily the best set of numbers of a bank operating on the UK and more than doubling the healthy profits of £5.9 billion that Barclays announced last week.

HSBC’s chief executive, Stuart Gulliver, is expected to receive total remuneration of around £12.5 million, £11 million of which will include potential bonuses, much of which cannot be realized or sold until the recipient retires. Mr Gulliver’s basic salary is £1.25 million, up by 13.6 per cent on last year. His bonus entitlement could have potentially been higher but HSBC is still failing to generate high enough returns for shareholders in line with targets set last year when it held a strategic review.

There are no indications that HSBC is looking to hide the bonuses it will pay or that Mr Gulliver is expected to waive entitlement to any of his bonus. HSBC are expected to announce details of bonus payments alongside its results tomorrow.

HSBC makes 90 per cent of its money outside of Britain and is likely to not be as heavily criticised for its bonus payments as the two part-taxpayer owned UK banks The Royal Bank of Scotland (RBS) and Lloyds, both of which made losses in 2011 but still announced bonuses for staff when they announced their financial results last week.

HSBC is a much larger bank than its three main UK banking rivals and operates in emerging markets where returns have been higher than from the UK and eurozone. Operating in the Asian markets helped HSBC to recover quicker from the financial crisis than many banks.

Neither HSBC nor Barclays received any direct help from the UK taxpayer, unlike RBS and Lloyds. The chief executives of both RBS and Lloyds have waived their bonuses for 2011 in the past few weeks. Barclays has refused to give details of the remuneration that its chief executive, Bob Diamond will receive this year despite announcing its results for 2011 last week.

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