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The HSBC investment bank millionaire factory marches on

HSBC’s Q4 and FY 2023 results might not have quite met analyst’s expectations, but that doesn’t mean they weren’t at least somewhat spectacular.

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Aside from impressive headline figures, which mostly came on account of retail banking’s performance, and CEO Noel Quinn noting that the bank had paid its highest full-year dividend since 2008, it was also a year to celebrate for the investment bank’s Material Risk Takers (MRTs).

The bank had more staff with over €1m in compensation on its payroll than ever, above both 2021 and 2022. The new millionaires didn’t just squeak by either, with most of the growth between 2022 and 2023 in salary bands above €1.5m.

 Although the figures in the first chart refer to bank-wide MRTs, that doesn’t mean the global banking markets division (the investment bank) didn’t pull its weight. Although there was an 8% decrease in the total number of investment banking MRTs at the first between 2022 and 2023, the collective bonus pool there increased by 6%.

That meant that the average investment bank MRT at HSBC earned $1.4m in 2023, not far behind blockbuster 2021’s figure of $1.47m per head. HSBC, curiously, didn’t go through the same huge uplifts in salary across the years that Barclays reported going through, with MRTs at HSBC averaging lower salaries in 2023 than 2020 – at Barclays, salaries went up by 40% over the same period.

Outside the bank’s upper echelons, bonuses at HSBC might be being distributed more transparently than before. Middle- and back-office staff between grades 4 and 8 – a rather broad swathe of mid-career positions – will be given “target variable pay”. Most front office bankers, however, will keep their existing pay structure, Bloomberg said.

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AUTHORZeno Toulon

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