HSBC’s year of ‘major progress’ in 2011 saw its profits rise 15% to Â£13.8 billion. This is one of the largest ever profits by a UK company.
This comes as the part publicly owned banks of Lloyds and RBS show losses and Barclays reports a fall in profits.
HSBC, the UK and Europe’s largest bank, puts this down to its ‘strong performance’ in the faster growing markets where it has increased revenue by 12% in the Asia, Latin America, Middle East and North Africa markets. These regions now account for 49% of the group’s revenue.
Profits in the UK were also up by 17.2% to Â£1.5 billion.
2011 was also a record commercial banking year for HSBC with profit before tax in that arm increasing by 31% to nearly Â£5 billion.
But their investment division did not do as well where profits dropped 24% to Â£15 billion mainly, the bank said, due to the Eurozone crisis.
The group’s total bonus pool shrank slightly to $4.22 billion from $4.3 billion in 2010 led by the investment bank’s pot shrinking from $1.64 billion in 2010 to $1.21 billion in 2011.
HSBC also divulged the details of its executive pay last year, the first UK bank to do so. It showed that the chief executive, Stuart Gulliver, received a total package worth $10.58 million, a hefty increase of $6.03 on 2010. But even this does not make him the best paid employee of HSBC. One senior executive below board level received $11.4 million.
Although this may further fuel the debate about the level of bankers’ bonuses at least there can be few claims that HSBC is rewarding failure.
Douglas Flint, Group Chairman, said “Throughout its history HSBC has sought to facilitate economic growth, as it is through such growth that businesses flourish and individuals fulfil the aspirations they have for themselves and those close to them. The cover of this year's Annual Report and Accounts illustrates a core element of HSBC's strategic direction that is connecting markets by providing the financing and risk management products that facilitate trade and investment flows. In so doing, we help our customers to achieve their growth ambitions and generate economic returns for savers and investors.”
Stuart Gulliver, Group Chief Executive said “2011 was a year of change for HSBC as we articulated a clear strategy to become the world's leading international bank. We made significant progress in executing this strategy to reshape the Group and improve returns.”