HSBC announces u-turn on staff pay freeze

The bank, which is set to release its full year results later this month, has recently been under pressure from shareholders to cut costs and improve its lacklustre performance.

However, the lender says it will now fund pay rises for 2015 from its variable bonus pool for 2016 after “listening to feedback”.

But the bank will still enforce a recruitment freeze across its global business in a bid to cut costs.

Chief executive Stuart Gulliver told staff about the plans in a memo.

He stressed that not all staff would receive a pay rise in light of the change of tack. He said he had “listened to this feedback and have as a result decided to change the way these cost savings are to be achieved”.

He added: “We will therefore proceed with the pay rises as originally proposed by managers as part of the 2015 pay review, noting that, consistent with prior years, not all staff will receive a pay rise.”

The bank put pay rises on hold last month as it looked to drive down costs in the face of mounting economic pressures driven by low interest rates, the tumbling oil price and a slowdown in China.

In statement, the bank said it has been targeting “significant cost reductions by the end of 2017”.

It has also been reported that HSBC is set to announce plans to keep its headquarters in the UK after a high-profile and lengthy review and months of speculation of the organisation’s future in the UK.