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HSBC notes higher pre-tax profits in 2013

February 24, 2014

LONDON - HSBC has reported a 9% rise in pre-tax profit for last year at $22.6billion (pounds 13.6 billion), which is $2 billion lower than had been expected. Shares in HSBC fell as much as 5 percent as pre-tax profit disappointed.

Britain's largest lender said profits from three out of four of its geographic divisions had risen, with the exception of Latin America where earnings fell 17pc to $1.97 billion.

HSBC, which is based in London, has axed more than 40,000 jobs and sold or closed 60 businesses over the past three years to cut costs.

The bank increased its bonus pool for staff to $3.9 billion in 2013, up 6 percent from the previous year. It paid 239 members of staff $1.7 million or more.

Chief executive Stuart Gulliver was paid $8 million in salary and bonuses last year, up from $7.5 million in 2012.

The bank also became the first to announce it would seek the necessary shareholder approval to lift the new EU bonus cap from 100 percent of its top executives' salary to 200 percent.

Gulliver said the results showed the progress the bank had made since he instituted a series of cost-cutting measures three years ago that have seen the lender's staff numbers reduced by 10pc.

"Today the Group is leaner and simpler than in 2011 with strong potential for growth. Our strong capital generation continues to support our progressive dividend policy and reinforces HSBC's status as one of the best capitalised banks in the world," said Gulliver.

The bank also revealed that 239 of its staff, 93 of whom are in the UK, had been paid 1million pounds or more last year.

HSBC also said that for 2014, it would offer senior staff higher fixed-pay allowances.

The move will enable the bank to sidestep new European rules, which came into force in January, preventing bankers from being paid bonuses worth more than twice their salary.

TUC general secretary Frances O'Grady criticised the move.

"It would be great if banks put the same effort into lending to small businesses and investing in infrastructure as they do to getting round EU rules on boardroom bonuses," she said.

HSBC shares fell almost 3 per cent to 635.7p on Monday as analysts warned of likely cuts to profit forecasts. They said HSBC revealed weaker than expected revenues across a number of its markets, including the UK.

Gary Greenwood, analyst at Shore Capital, said the results, which were lower than consensus expectations, were "disappointing".

"Given the headline miss in the 2013 results, we would be surprised if there were not to be downgrades to our own and market consensus expectations for 2014 and beyond," he added, reported BBC

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Source: Big News Network (United Arab Emirates)

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