BRITAIN's biggest bank HSBC will dish out billions of pounds in bonuses to its top dealmakers, it announced yesterday.

The top dog of the UK's four biggest high street lenders ramped up its bonus pool for its bankers by nearly a third to £2.6bn.

The decision to increase bonuses was driven by HSBC's profits more than doubling over the last year to £13.9bn, up from £6.5bn in 2020.

HSBC's Asia operations generated £9bn of the profit take, highlighting the bank's continued reliance on its Hong Kong and Chinese businesses to boost its bottom line.

However, the bank's exposure to the Evergrande crisis resulted in it booking a £367m loss.

Evergrande was once China's largest property developer, building millions of homes across the country. A debt-fuelled expansion ran into trouble when a slowdown in China's property market caused prices to fall, resulting in Evergrande struggling to meet its liabilities.

There was initially concern that an Evergrande default could send ripples throughout the global financial system, but these fears have now eased.

HSBC announced plans to ramp up distributing profits back to shareholders. It now intends to launch a second buyback programme worth £735m after the existing buyback ends.

The bank released £661m of provisions set aside to deal with an expected wave of Covid-related loan defaults. Last year, HSBC ring fenced £6.5bn of provisions for loan losses.

"We made good progress against our strategy in 2021, which contributed to a strong financial performance that was supported by the global economic recovery. All of our regions were profitable and we saw growth in the fourth quarter of 2021 in many of our business lines," Noel Quinn, HSBC chief executive, said.

The lender said it is carrying "good business momentum" into this year, with bosses expecting mid-single-digit lending growth across the course of the year. Loans to households and businesses swelled to over £1.02 trillion.

HSBC's results continue a trend in which a strong economic rebound has led the UK's largest banks swinging back to profitability.

Barclays is due to report today.

(c) 2022 City A.M., source Newspaper