HSBC is preparing to adopt a stricter compensation structure, reducing or eliminating bonuses for underperformers, reported Bloomberg.
The move is said to be a part of an effort to bring performance incentives closer to practices seen at major US banks, the news report said.
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According to sources, underperforming employees in areas such as investment banking and wealth management will be impacted, and some may be encouraged to leave the company following this year’s bonus round.
The decision would also affect those at the managing director level.
However, no final decisions have been confirmed.
In an e-mailed statement to Bloomberg, the bank representative said: “We are committed to ensuring our employees are rewarded competitively, with a focus on differentiation determined by performance, to attract and retain talent.”
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By GlobalDataThis move coincides with a significant restructuring led by chief executive Georges Elhedery, who assumed the position in September 2024.
Elhedery has closed most of HSBC’s deals and equity underwriting units in the US, UK, and continental Europe, and merged the commercial and investment banking divisions.
These changes have prompted a number of senior departures.
For 2024, HSBC’s total bonus pool was unchanged at $3.8bn despite many firms raising payouts industrywide.
Certain staff in corporate and institutional banking were warned to expect reduced bonuses, added the news report.
Elhedery has stated that his restructuring plan aims to achieve $3bn in savings and make HSBC a “simpler, more dynamic and agile organisation.”
The cost-to-income ratio rose to 49.9% for the first half of 2025, up from 43.7% a year earlier due to increased operating expenses.
HSBC’s main base is in London but it has longstanding connections in Asia and has been increasing its focus on both Asia and the Middle East against a backdrop of shifting global risks.
The bank is also reportedly assessing strategic options for its insurance unit in Singapore.
This potential sale would follow recent asset disposals in Europe and North America, including last year’s transactions involving its UK life insurance business, sold to Chesnara, as well as its custody business and private banking operations in Germany, and its French life insurance unit.
