HSBC defends $1bn pay hikes

HSBC Holdings plc said a $1bn (€760m) increase in its wages bill in Brazil, China and other emerging markets was the price of avoiding the stagnant growth which has dogged some rival lenders more dependent on Europe.

Posting a pre-tax profit just shy of $22bn yesterday, the largest in 2011 by a Western bank, HSBC said it was confident growth in Asia, Latin America and the Middle East would continue to offset sluggish conditions in Europe.

However, with costs rising 10% in 2011, due partly to surging wages in emerging markets, chief executive Stuart Gulliver said it would be a challenge to meet the 2013 target for reducing costs as a proportion of income. HSBC employs 400 people in Ireland.