HSBC attacks 'perverse' pay; awards banker £13m - papers

HSBC chairman Stephen Green attacked "perverse" pay practices in banking and called for a "more sober and reasonable approach to compensation" as it emerged the bank paid two senior employees almost £25m last year, The Telegraph reports.

In total, HSBC's five top-paid bankers received £33.6m in guaranteed bonuses and "inducements to join", yesterday's full-year results revealed.

At the same time, Mr Green said: "The industry needs to recover a sense of what is right... the contributors to the crisis were, in some cases, among the biggest beneficiaries."

Two US recruits to HSBC's investment bank, believed to be Tom Cole and Dan Toscano, were paid £13.7m and £11m. Asked if he would make such payments now, Mr Green said: "The world has changed a lot in the last 12 months." See full story...

Meanwhile, The Times says HSBC has conceded its purchase of Household International, the US sub-prime lender, had been a $15 billion blunder and would continue to drain the bank's resources for another two years.

It reports the full scale of the disaster was laid out for shareholders as the bank unveiled plans for a £12.5 billion rights issue to shore up its balance sheet.

Total loan losses and other credit impairments in the American business, renamed HSBC Finance, ballooned to $16.3 billion in 2008. Loans would continue to sour and produce losses in 2009 and 2010, HSBC said. Most US operations would be shut down, with the loss of 6,100 American jobs.

The bank said that it had written off the $15 billion purchase cost of Household, which was bought in 2003 in a shares-based deal. It was HSBC's biggest acquisition to date. See full story...

However, of the banks rights issue, Mils Pratley of The Guardian says it is "commendable" HSBC is raising funds conventionally rather than tapping up governments.