£15bn profit at scandal-hit HSBC: Boss of bank that laundered drug money will pocket £2m

Bonus is reward for bank's estimated pre-tax profits of about £15.6bn

Profit would be biggest made by British bank since global financial crisis

Royal Bank of Scotland last week announced bonuses totalling £600m

Bonus: Stuart Gulliver is expected to receive a windfall of around £2million as part of a total pay and benefits package worth between £6million and £7million for 2012

HSBC will hand its chief executive a huge bonus as it today posts one of the biggest profits in banking history.
Stuart Gulliver is expected to receive a windfall of around £2million as part of a total pay and benefits package worth between £6million and £7million for 2012.
Last week Royal Bank of Scotland, which is 82 per cent owned by taxpayers, announced it was paying bonuses totalling £600million – despite posting losses of £5.2billion.
Downing Street caused controversy by praising the bank for its ‘responsibility and restraint’.
Mr Gulliver’s handout is reward for HSBC notching up pre-tax profits of around £15.6billion, according to City estimates.
That is just short of the bank’s record haul of £15.9billion in 2007 and would be the biggest profit by a British bank since the global financial crisis.
Mr Gulliver’s bumper payout comes just months after the bank was slapped with a £1.25billion fine by US regulators following accusations it laundered billions of pounds for rogue states and drug cartels through its America division.
HSBC was accused by the US Senate of fostering a ‘polluted culture’, ignoring warnings and breaching safeguards that could have prevented the laundering of money from Iran, Syria and Mexico.
London-based banker David Bagley, head of HSBC’s compliance division, which is meant to prevent breaches of the law, sensationally quit in front of the Senate committee. He had been with the bank for 20 years.
The US fine will have an impact on the company’s overall bonus pot, which is expected to be in the region of £2billion compared to the £2.8billion seen in 2011.

Mr Gulliver would have been entitled to a total package worth £12.5million, including long-term share awards, but is likely to receive about half that sum.
His bonus of £2million, which compares with £2.1million last year, will be deferred and subject to possible ‘clawback’, where he will not be able to cash it in until he retires from or leaves HSBC.
Deborah Hargreaves, of the High Pay Centre think-tank, said: ‘Banks should get their own house in order and ensure the internal culture has changed so that wrongdoing is stamped out before they think about paying bonuses of any kind to those in charge. HSBC clearly presided over a culture in the US with scant regard for the rules and little respect for compliance.

Performance: Mr Gulliver's handout is reward for HSBC notching up pre-tax profits of around £15.6billion, according to City estimates. Pictured is the bank's headquarters, in Canary Wharf, London

‘The buck for that has to stop at the chief executive’s door and if there is no penalty, what’s to stop it happening again.’
Despite being based in Canary Wharf, HSBC makes an estimated 90 per cent of its money outside Britain and has benefited from its presence in emerging markets in Asia. Since taking over as chief executive in 2011 Mr Gulliver has led an overhaul of the bank’s operations.
He has cut about 10 per cent of its workforce and pulled out from 46 countries, as well as sold off a number of general insurance businesses.

'Banks should get their own house in order and ensure the internal culture has changed so that wrongdoing is stamped out before they think about paying bonuses of any kind to those in charge'

- Deborah Hargreaves, of the High Pay Centre think-tank

Sky News also reported that HSBC will for the first time publish a single figure for the aggregate pay and benefits packages awarded to Mr Gulliver and his most senior colleagues.
It is designed to show compliance with Government rules on disclosure that will come into force later this year.
On Tuesday London-based Standard Chartered is also expected to cut its total bonus pot and the payout for its chief executive, Peter Sands.
Despite a record trading year, the bank was also hit by a US regulatory probe into its dealings with Iran.
According to Sky News, Standard Chartered will pay out around £930million in bonuses, down from £1.02billion a year earlier. Mr Sands will receive £2million compared with the £2.3million he was handed for 2011.