HSBC has set aside an additional £910m for customer redress as its chief executive takes a £1.3m bonus, its 2014 accounts reveal.
The bank’s financial results, published today, show its chief executive Stuart Gulliver received a total pay package of £7.6m last year, including a base salary of £1.3m and a £1.3m bonus. This compares with a total pay package of £8m and a £1.8m bonus in 2013.
Gulliver had been under pressure not to take his bonus following claims earlier this month that HSBC supported more than 1,000 UK customers in dodging tax bills between 2005 and 2007.
It was also reported over the weekend that Gulliver held £5m in a Swiss bank account through a Panamanian company.
The results show HSBC’s pre-tax profit fell by 17 per cent, from £14.7bn in 2013 to £12.2bn in 2014.
Group chairman Douglas Flint says the drop reflects the negative effect of significant items including fines, settlements and UK customer redress.
The accounts show that as at 1 January 2014, HSBC had set aside £1.6bn for customer remediation. Over the year, it set aside an additional £910m.
The bank used £1.2bn of the provisions in 2014.
The increase in redress includes an additional £624m set aside for payment protection insurance misselling, and an additional £187m for interest rate swap misselling.
HSBC has also set aside £246m for the repayment of interest to customers where it failed to comply with the UK Consumer Credit Act.
For legal proceedings and regulatory matters, the bank set aside £1.2bn as at 1 January 2014, which it doubled during the year.
This includes £358m for a number of US and UK investigations into Forex trading which HSBC says are ongoing.
In the results, Flint says HSBC “deeply regrets and apologises for” the failures in its Swiss private bank.
He says: “The recent disclosures around unacceptable historical practices and behaviour within the Swiss private bank remind us of how much there still is to do and how far society’s expectations have changed in terms of banks’ responsibilities.
“They are also a reminder of the need for constant vigilance over the effectiveness of our controls and the imperative to embed a robust and ethical compliance culture.”
Flint received a total pay package of £2.5m in 2014, including a base salary of £1.5m. His total pay is up from £2.4m in 2013.