Standard Chartered bankers will receive their biggest bonuses since the financial crisis, after rising global interest rates pushed the lender’s profits up 28%.
The London-headquartered but emerging markets-focused bank said it had increased staff bonuses by 16%, to a total of $1.6bn (£1.3bn), in light of the fact that the bank had performed strongly even amid “ongoing external challenges”, including the war in Ukraine.
It is the largest bonus pool since at least 2009, according to data disclosed in Standard Chartered’s annual reports, surpassing the $1.4bn pool distributed to bankers in 2013.
The bump in payouts also benefited the chief executive, Bill Winters, whose pay rose 16% to $5.5m for 2022, thanks to a $2.5m bonus that rose in line with profits.
That marks his biggest payout since he joined Standard Chartered 2015, having been paid $12.8m that year thanks to a share buyout plan meant to compensate him for quitting the hedge fund he was previously running.
But the top boss was outdone by at least one unnamed banker who was paid more than €13m (£11.5m) last year, according to Standard Chartered’s latest disclosures regarding its highest-earning staff. In total, 250 employees received more than €1m last year, seven of whom were paid more than €5m.
While the bank, which makes most of its profits in Asia but also operates in Africa and the Middle East, did not provide any details regarding its highest earners in its annual report, it said it had reacted to high inflation by making “targeted changes to salaries” to support colleagues in markets with the “most extreme economic conditions”.
This resulted in a 6.6% rise in its average pay for its nearly-83,200 global staff, though the biggest increases were aimed at its most junior colleagues and those in countries hardest hit by rising prices.
The same rising inflation trends have resulted in higher global interests rates that have ultimately benefited banks including Standard Chartered, which reported a 12% rise in net interest income. Net interest income accounts for the difference in what is earned from charges on loans and mortgages and what is paid out to savers.
Standard Chartered said the relaxing of Covid restrictions in China provided further “grounds for optimism in 2023”.
Even when accounting for an increase in the amount of cash it put aside for potential defaults, from $263m to $838m, Standard Chartered reported a 28% rise in pre-tax profits to $4.3bn.
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The bank announced on Thursday that it was planning to buy back $1bn worth of shares from investors after its strong performance.
Winters tried to quash speculation that the lender would be open to a takeover, amid reports that First Abu Dhabi Bank was considering a fresh bid.
Winters said the bank had “had no engagement nor solicited any engagement” from anyone and was “happy to be accomplishing targets” on its own.
Standard Chartered’s London-listed shares were up 4% on Thursday, making it one of the biggest risers on the FTSE 100.