Despite money laundering fraud, HSBC posts historic profits in 2012

HSBC will hand out a huge bonus to its chief executive Stuart Gulliver as the scandal-hit bank is to announce one of the biggest profits in banking history. Stuart Gulliver is likely to receive £2m as part of a total pay and benefits package worth between £6m and £7m for 2012, a year where HSBC posted pre-tax profits of £15.6bn rising 8.7%, despite being embroiled in money-laundering scandal. HSBC’s profits for 2012 fall just short of the bank’s record haul of £15.9bn in 2007 and would be the biggest profit by a British bank since the global financial crisis.

Stuart Gulliver’s payout comes just months after HSBC was slapped with a £1.25 billion fine by US regulators following accusations that it laundered billions of pounds for rogue states such as Iran, Syria and Mexico 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.

The US fine will have an impact on HSBC’s overall bonus pot, which is expected to be in the region of £2bn compared to the £2.8bn seen in 2011. Stuart Gulliver would have actually been entitled to a total package worth £12.5m, including long-term share awards, but is likely to receive about half that sum. HSBC chief’s pay of £2m, which compares with £2.1m 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.