HSBC retail revamp key to end drag of redress on profits
Banking giant's salary structure overhaul aims to cut risk of sales misdeeds and compensation payments, which remain a drag on earnings
Redress is a word that comes up a lot in an interview with John Flint, the first he has given since taking over as HSBC's global head of retail banking and wealth management 16 months ago.
Given the about US$3.6 billion - equivalent to 16 per cent of the group's net profit last year - that his division of the world's second-biggest bank by assets has set aside, or paid out, since 2011 to compensate customers worldwide for various infractions, it is hardly a surprise.
By Flint's own admission, it could be so for years to come, despite his insistence that full provision has been made for all remediation costs incurred or foreseeable.
"My personal view is that we are through the worst of this, but it would be a very brave man to say it is finished," he said in his office at HSBC's iconic Hong Kong headquarters last week.
While "this" is broadly about compensation HSBC has been ordered to pay for past misdeeds, particularly over its sales of payment protection insurance in Britain, it is also part of a worldwide regulatory response to the excesses in the international banking industry that ultimately sparked the 2008-09 global financial crisis.