British financial services firm HSBC Holdings Plc (HBC,HSBA.L) and peer Standard Chartered Plc (STAN.L,STAC.L, SCBFF) are set to cut annual bonuses for their chief executives as well as senior executives after the two banks were stung by hefty fines for violating US money-laundering laws, according to media reports on Sunday.
The executive bonus cuts could be announced along with the banks annual results over the next two days.
London-based HSBC, Europe's biggest bank by market value, is reportedly expected to give Chief Executive Stuart Gulliver a 2012 bonus of just below 2 million British pounds, down from the 2.1 million pounds he received for 2011.
HSBC reached a hefty 1.2 billion pound settlement with U.S. regulators to settle money laundering and sanctions breaches which saw HSBC's Mexican arm being used by drug cartels and terrorist organizations.
HSBC, which is reportedly anticipated to post record annual profits, is expected to pay total bonuses of about 2 billion pounds in 2012, compared to the 2.8 billion pounds paid last year.
Meanwhile, rival Standard Chartered could end up cutting Chief Executive Peter Sands' annual bonus to below 2 million pounds, compared to the 2.3 million pounds he received for 2011. The bank is expected to payout total bonuses of about 930 million pounds, compared to 1.02 billion pounds in 2011.
Standard Chartered also reached a 667 million pounds settlement with U.S. regulators to settle violations of US sanctions laws and U.S. dollar payment practices. The bank was charged for failure to disclose transaction through their subsidiaries in the U.S. with Iran as well as three countries Myanmar, Libya and Sudan when they were under U.S. sanctions.
HBC closed Friday's regular trading session at $54.83, down $0.61 or 1.10% on a volume of 1.45 million shares.
On the London Stock Exchange, HSBA.L closed at 728.10 pence, down 3.30 pence or 0.45% on a volume of 22.55 million shares, and STAN.L closed at 1,781.00 pence, up 15.00 pence or 0.84% on a volume of 4.91 million shares.
by RTT Staff Writer
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