HSBC to phase out fixed-pay allowances from 2028

By Yantoultra Ngui

HONG KONG, Oct 12 (Reuters) - HSBC HSBA.L will phase out fixed-pay allowances for staff from January 2028, an internal memo seen by Reuters showed on Monday.

The move follows UK regulatory changes that removed a 2:1 cap on variable-to-fixed pay, the memo said, which had limited the proportion of an employee's total compensation that could be paid in bonuses.

Fixed-pay allowances are amounts paid by companies on top of base salary, typically for specified expenses such as commuting.

HSBC said base salaries would not be reduced and its approach to total compensation would not change.

Staff affected by the move may have more of their compensation paid through variable pay, such as bonuses.

"As a global bank, adapting our approach in this way strengthens our ability to pay for performance, better differentiate, attract the best talent, and recognise those who deliver the best outcomes for our customers, clients and stakeholders," an HSBC spokesperson said.

HSBC has been reshaping its business under CEO Georges Elhedery, who took the role in September 2024, merging some businesses and splitting its structure into four main units.