HSBC’s Stuart Gulliver gets £9m bonus as investment banking drives profits

By Harry Wilson, Financial Services Correspondent

Published: 1:38PM GMT 01 Mar 2010






HSBC Hldgs

Mr Gulliver, who in addition to running HSBC’s Global Banking and Markets
business and its asset management arm is also head of the bank’s operations
in Europe and the Middle East, has been paid the stock bonus in addition to
his basic annual salary of £800,000.

Global Banking and Markets provided the majority of HSBC’s profits in 2009
after what the bank said was an “exceptionally strong” year for the
business. Profits before tax in GBM reached £6.9bn, equal to more than 100pc
of the group total, which was hit by impairments on loss-making assets.

Mr Gulliver is one of three HSBC employees to receive a bonus worth £9m,
according to the bank’s annual report, though the other are not named.

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HSBC’s £7bn profits to offer insight into Asian economy

By Harry Wilson

Published: 9:57PM GMT 28 Feb 2010

Expectations are high for the bank, which has been regarded as “safe haven”,
and it is not likely to disappoint as it unveils pre-tax profits of at least
£7bn, with some analysts forecasting as much as £11bn.

However, those looking for a big payout from HSBC on the back of its success
could be in for a disappointment, with most City watchers expecting the
dividend to come in towards 22p.

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Pressure on Government to slash RBS payouts after global banking retreat on bonuses

By
Simon Duke
Last updated at 9:59 PM on 19th January 2010
A global clampdown on bankers’ bonuses is piling pressure on the Government to curb a £1.5billion bonanza at Royal Bank of Scotland.
A public outcry over fat-cat pay is forcing international banks and some countries to reconsider the end-of-year bonuses which are due in the next few weeks.
RBS, which is 84 per cent owned by the taxpayer, is expected to pay up to £85,000 to each of its 17,500 staff at its investment bank after profits at the division soared last year.
Row: Royal Bank of Scotland is currently due to hand out around £1.5billion in bonuses despite being 84 per cent owned by the taxpayerBut in a hugely symbolic move, the Dutch government yesterday
took a strong lead by imposing brutal pay restrictions on its
nationalised lender, ABN Amro. One of Europe’s biggest banks, Credit Suisse, followed suit as
it took an axe to payouts for senior UK staff in response to Chancellor
Alistair Darling’s ’supertax’ on bonuses.

Meanwhile, American investment bank Goldman Sachs was forced
to delay telling its staff how much they will receive in salary and
bonuses because of President Barack Obama’s planned levy on Wall
Street.
Tackling the issue: Vince Cable said the nation did not want ‘unstable banks‘
Yesterday’s three announcements throw into sharp relief the
payouts RBS is planning to lavish on staff at its ‘casino’ banking
wing. RBS chief executive Stephen Hester vowed to pay the ‘minimum
we can get away with’ after his bank’s £45billion bailout. But he is
still expected to pay out around £1.5billion after profits at the
division soared last year. Coming just over a year since the financial system came within hours of imploding, the expected RBS bonus round has provoked a storm of public outrage.
The Liberal Democrats’ Treasury spokesman, Vince Cable, said
last night: ‘This underlines the point that there are no bolt-holes for
banks. ‘The Swiss, in particular, are looking to tackle the issue of pay.
‘They don’t want unstable banks any more than we do.’
Earlier this week, singer Billy Bragg launched a campaign on Facebook to halt the ‘excessive’ payouts.
Some 5,000 people have joined the activist, saying they will
withhold their taxes unless the Government asserts its authority over
RBS. Yesterday the Dutch government moved to curb pay at ABN Amro.
Bonuses will be slashed by 65 per cent and salaries for top executive
will be capped at £540,000. Ironically, the decision by former RBS boss Sir Fred Goodwin
to mastermind the £50billion break-up of ABN Amro almost brought down
the Scottish bank. The deal’s toxic legacy forced the Government to
nationalise RBS. ABN Amro itself was carved up, with the Benelux operations
sold to Belgian financial group Fortis, which collapsed in late 2008
before the Dutch government stepped in. Yesterday Credit Suisse slashed the bonus pool for its senior UK staff after buckling to official pressure.
Some 400 London-based managing directors of the firm will see their payouts cut by 30 per cent in the wake of the UK supertax.

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Treasury seizes control of Royal Bank of Scotland’s billion pound bonus pool

By
Daily Mail Reporter
Last updated at 11:24 AM on 02nd December 2009

The Treasury has demanded control of Royal Bank of Scotland’s bonus pot, it emerged today.As part of the terms of its deal to insure bad debts, the Government wants to dictate both the “quantum and shape” of the payouts at the bank for 2009.It is understood that institutional investors have raised concerns about RBS’s ability to operate competitively after the move, which would give the Treasury a veto over the size and terms of bonus payments.It is thought RBS will now have to agree the size of this year’s payouts with UK Financial Investments (UKFI), which manages the public stakes in banks.
Bonus showdown: Stephen Hester, Chief Executive of Royal Bank of Scotland
RBS, which will be 84% state-owned under the terms of the Asset Protection Scheme (APS), has already agreed to limit cash bonuses to those paid under £39,000 a year, with higher earners paid in shares over three years.The bank has already put aside £1.79 billion in the first half of this year to cover staff expenses, including salaries and bonuses.The recent rebound in stock markets has led to bumper investment banking hauls so far this year and the sector is estimated to be preparing to fork out a 50% hike in annual windfalls to £6 billion.RBS’s global banking and markets division, which employs around 20,000 people, is looking set for a record year. This division alone is thought to have set aside an estimated £1 billion in staff payouts last year.

The bonus clampdown provides a challenge for RBS, as remuneration is key in the banking sector to attracting and retaining top staff.
Taking control: Alistair Darling has demanded control of RBS’s bonus potStephen Hester, chief executive of RBS, has referred to payment restrictions as “additional obstacles that makes our job of recovering money for the taxpayer more difficult”, but said he understood why it was being done.Suggestions that the Government would step in to limit this year’s bonuses met with concern from shareholders.The Times reported that investors, backed by the Association of British Insurers (ABI), were worried that RBS would lose staff and find it difficult to attract new applicants.One said that the move was “wholly political”.Peter Montagnon, ABI director of investment affairs, said he wanted RBS to negotiate reasonable settlements for employees who had performed well.”It would not be acceptable to yield to the short-term wishes of one shareholder if this means sacrificing value for all,” he said.RBS is understood to have agreed the deal only to repair its balance sheet.The firm told The Times that the requirement “may adversely impact” on its ability to retain key staff, depending on the result of negotiations with UKFI.

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HSBC ’significantly ahead’ as US bad debts slow

HSBC said today that its third quarter operating profit was “significantly
ahead” of the same period last year, helped by the first fall in bad
loan write-offs from its American consumer finance arm since the start of
2006.

The global bank, which has a strong presence in Hong Kong and Asia, said that
it had seen strong growth from investment banking.

Michael Geoghegan, the chief executive of HSBC, said that although operating
profits would be ahead of the trading period between July and September last
year, a one-off charge for the falling market value of its own bonds would
drive third quarter profits below 2008.

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Bank tax rebellion: World’s finance chiefs pour cold water on Gordon Brown’s plan for a levy on all transactions

By
Sam Fleming
Last updated at 10:39 PM on 08th November 2009

Gordon Brown was tonight fighting to shore up proposals for a global banking super-tax after they met international hostility.
The Prime Minister faced immediate opposition from leading countries when he opened the G20 summit with the suggestion of a tax on every banking transaction.
The Tories seized on signs of divisions within the Government over the scheme, claiming Chancellor Alistair Darling had not been adequately consulted on Mr Brown’s surprise proposal.
No way: The PM’s plan was rejected by U.S. finance chief Timothy Geithner (right)
And the suggestion of a so-called ‘Tobin tax’ - named after the U.S.
economist James Tobin - triggered outrage in the City, with one leading
banking figure describing the PM’s speech as ‘naked politics’. But a No10 source insisted last night the Prime Minister still
backed the levy, with a possible rate of 0.05 per cent on trades. The row overshadowed the final major G20 gathering for 2009, a
year in which Mr Brown won plaudits in some quarters for his leadership
of the group of top nations. It is also the latest in a series of embarrassments and
setbacks for Mr Brown, including the rising British death toll in
Afghanistan and the MPs’ expenses row.

Opening the summit in St Andrews in Scotland on Saturday, he
insisted a ‘better economic and social contract to reflect the global
responsibilities of financial institutions to society’ was needed. A levy on financial transactions should be considered ‘with urgency’ as one of several options, Mr Brown argued.
A Downing Street source said the PM had wanted to galvanise the
international community with his speech, arguing the process needed
’some shock and awe’. But within hours of his address, top international figures expressed doubts about a levy on financial transactions.
U.S. treasury secretary Tim Geithner said it is ‘not something
we are prepared to support’, while International Monetary Fund chief
Dominique Strauss-Kahn felt it would be too difficult to enforce.
That’s how you do it: Mr Geithner also helped fix Alistair Darling’s collarEuropean Central Bank president Jean-Claude Trichet said he
was ‘not personally convinced’, while Canadian finance
minister James Flaherty said the idea was ‘not particularly
attractive’.
Russian finance minister Alexei Kudrin said: ‘I’m quite
sceptical about such taxes. Gordon Brown is well known as the person
who has been raising taxes all the time.’ Tory spokesman Mark Hoban
said: ‘This is embarrassing. Gordon Brown has demonstrated that he will
put nothing before a cheap headline - including Britain’s credibility
before the world.
‘How long did the Treasury know about this announcement given they dismissed it as unworkable six weeks ago?’

No10 and Treasury sources insisted Mr Darling had been fully consulted and helped to draft Mr Brown’s speech.

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Humiliation for Brown as plan for global banking tax is rejected by U.S. and others at G20 meeting

By
Daily Mail Reporter
Last updated at 11:19 PM on 07th November 2009

Gordon Brown was left embarrassed tonight after his plan for international bankers’ transaction tax – only to have it flatly and publicly rejected by the Americans and others. The Prime Minister raised the possibility of the worldwide levy that would pay for bailouts in a speech to the world’s most powerful finance ministers.Mr Brown said the so-called ‘Tobin Tax’, named after the U.S. economist who invented it, could help achieve a ‘social contract’ between the big financial institutions and the public.No way: The PM’s plan was rejected by U.S. finance chief Timothy Geithner (right)
But U.S. Treasury Secretary Timothy Geithner flatly rejected the idea, as did Canadian finance minister Jim Flaherty and their Russian counterpart Alexei Kudrin.Mr Geithner said: ‘A day-to-day financial transaction tax is not something we are prepared to support.’He later told a news conference: ‘This is an idea that has been around for a long time. ‘Many countries have a lot of experience with the design of these kinds of taxes. I think, frankly, the experience has been mixed.’And Mr Flaherty said: ‘We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at.’Mr Kudrin said: ‘I am a sceptic on such taxes. Gordon Brown is known for always raising taxes.’ The head of the IMF, Dominique Strauss-Khan, said he believed a transaction tax was unlikely to be adopted as ‘transactions’ were difficult to measure. To work, the tax would have had to be adopted by all the world’s major financial centres.And the British Bankers’ Association chief executive Angela Knight said: ‘The reason it has never been implemented is, while theoretically it is OK, practically it doesn’t operate.’Mr Brown’s call came in a speech to finance ministers from the G20 group of countries meeting in St Andrews.
That’s how you do it: Mr Geithner also helped fix Alistair Darling’s collar
He called for a new global ‘social contract’ with the financial institutions to ensure taxpayers around the world would never again have to bear the cost of banking failure.He said that in future there must be a ‘just distribution of risks and rewards’.He said: ‘I believe we should discuss whether we need a better social contract to reflect the global responsibilities of financial institutions to society.‘This is a unique sector that, when it fails, imposes such a high cost to the wider economy and damage to society that government intervention becomes essential. So the taxpayer had no real choice but to step in to keep the system afloat.’Mr Brown said that it could be achieved through an insurance fee, a special ‘resolution fund’, contingent capital arrangements, or a global financial transactions levy - the so-called ‘Tobin tax’.Mr Brown stressed that in order to work, the measures would have to be implemented by all the major financial centres around the world - including the U.S., Europe, Asia, the Middle East and Switzerland.‘Let me be clear: Britain will not move unless others move with us together,’ he said.The measures would also have to be ‘non-distortionary’ - to ensure they did not result in inefficient allocation or encourage avoidance - and should reinforce the action already taken to stabilise the financial system.He stressed that the contribution of the financial services sector would have to be ‘fair, measured and enable financial services to make their necessary contribution to future economic growth’.Mr Brown’s tax rebuff eclipsed the rest of the finance summit, where ministers pondered how to finance a deal to combat climate change, and their economies could be nurtured back to growth.Speaking later about the transaction tax idea, the Prime Minister later ducked a question on whether he would personally favour such a tax if the conditions were met.He said: ‘I am naturally concerned that the taxpayer gets a fair deal - especially that the taxpayer gets a fair deal from the institutions that in the last year have benefited massively from support across the world.‘That’s why I believe it is right that we should do this work.’ 

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RBS chief Stephen Hester remains ‘upbeat but realistic’ despite hurdle of bonus caps

By Louise Armitstead

Published: 12:38PM GMT 06 Nov 2009

Shares in RBS
soared by over 7pc to 37.8p in late morning trading as the City supported Mr
Hester’s view that he “can restore RBS to standalone strength.”

The bank’s shares rose despite RBS reporting a pre-tax loss of £2.08bn for the
third quarter after bad-loan provisions tripled and profits at its
investment banking arm halved. RBS made a pre-tax profit of £1.09bn for the
same period last year - just before the financial storm swept UK banks.

Mr Hester said: “The faster the pressures on us become similar to those on our
competitors, the more likely we are to succeed – a goal which rather clearly
aligns staff, customers, shareholders and UK taxpayers.”

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RBS risks investment bank sale in EC fight

By Graham Ruddick

Published: 8:57PM GMT 01 Nov 2009

Selling Citizens, which has 26,000 employees, has emerged as one of Brussels’
options for penalising RBS’s receipt of state aid. Neelie Kroes, the EU
competition commissioner, is understood to have taken RBS aback by the
severity of her demands.

She has ordered the sale of the Churchill, Green Flag and Direct Line
insurance businesses, more than 312 RBS branches in England, Global Merchant
Acquiring, a card payments processing arm, and a reduction of the investment
banking operations.

However, RBS chief executive Stephen Hester, sees its investment banking
operations, Global Banking and Markets (GBM), as a key driver in restoring
the bank’s financial health. In RBS’s interim results, GBM made £4.87bn of
operating profits – 77pc of the “core” bank’s total earnings.

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G20: Banks to be forced to double capital levels

By James Quinn in Pittsburgh

Published: 10:02PM BST 25 Sep 2009

Although the
international body – which is to replace the G8 as the world’s
leading economic forum – last night stopped short of placing specific
minimum requirements for both capital and liquidity, world leaders agreed
the Basel Committee on Banking Supervision will draft new rules for each by
the end of this year.

The change is part of the drive to strengthen the global banking system to
withstand shocks and make it less likely to rely on government capital in
the event of future crises.

Full details of banks‘ new commitments were contained in the final report of
the Financial Stability Board (FSB), details of which were released shortly
after the final communiqué was issued.

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