Bottom Line: Bank takes Flinty stance on bonuses

Elizabeth Fournier

FOR HSBC, a bank that makes 80 per cent of its profits outside of Europe yet is domiciled within it, the EU’s planned bonus cap would be a huge disadvantage when trying to attract talent.

So it’s no wonder HSBC chairman Douglas Flint came out (almost) all guns blazing yesterday – his bank has more than most to lose.

But if he really wants to scare the UK’s politicians and regulators into taking a stand against Brussels he still has one huge card up his sleeve. Flint and his board are asked at every results presentation whether they’re ready to up sticks and get out of the UK, and so far the answer has always been the same – not now, not yet (and yesterday) not because of remuneration issues.

But in just 18 months the questions will be more pertinent than ever. Flint told MPs last December that HSBC was waiting for the full details of Britain’s banking reform plans before next reviewing its domicile – and cited 2015 as the date he had in mind.

That just happens to be the date the bonus cap will first take effect – applied to the 2014 bonus round.

In the meantime, the bank is clearly not afraid of looking for ways to jump around – rather than through – the rulemakers’ hoops.

As Flint admitted, the most obvious way is to up base salaries. Let’s hope that’s enough of a threat to keep regulators on their toes.