HSBC has announced further cost cuts after reporting a major slump in annual net profits on Tuesday. Reportedly, staff at the British banking giant along with its subsidiary Hang Seng Bank will have their annual pay raise of 3% reduced to 2%.

In November last year, reports surfaced that senior management at HSBC and Hang Seng Bank would face a pay freeze in the upcoming year. Now, Apple Daily reports that senior management at HSBC and Hang Seng Bank will not enjoy any pay raise. Affected staff are those from band 0 to 3 including chief executives and director grade or above.

Last year, HSBC chief executive Stuart Gulliver made a decision to issue a pay rise for 2016 with money from a variable bonus pool after initially telling employees their pay for 2016 would be frozen.

Staff did not have high hopes for bonuses this year, since their pay raise in 2016 was funded by a bonus pool originally intended for payments to be made in 2017.

A spokesperson from Hang Seng told the Oriental Daily that staff's bonuses are issued according to their performances.

Reportedly, on average staff at HSBC have received bonuses equivalent or a little higher than one month's pay and there are also staff with no bonus. Last year, the average bonus issued by the bank was worth 1.5 months of staff's monthly pay.

The slump that HSBC is going through has little effect on the compensation package for its chief executive. Gulliver, who was voted the most hated CEO in banking last year by Autonomous Research, saw his remuneration for 2016 rise to £7.7 million (HKD 77 million), up from £7.3 million (HKD73 million) in 2015.

However, Gulliver's bonus was reduced following a report from regulators which criticised the slow pace of the bank in adopting new policies to improve anti-money laundering measures.

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