HSBC cancels plans for 2016 pay freeze

HSBC has reportedly made a U-turn on its planned 2016 pay freeze.

A memo from chief executive Stuart Gulliver, seen by Reuters on Thursday, said pay rises will be funded from the lender’s 2016 variable bonus pool, meant for bonuses paid in 2017.

However, HSBC will keep its hiring freeze in place for the year as part of cost-saving measures.

Last month, the bank revealed it was halting pay increases and the hiring of new staff this year, but Gulliver said following feedback he would cancel the freeze on salaries.

The CEO said he had "listened to this feedback and have as a result decided to change the way these cost savings are to be achieved", according to the memo.

"We will therefore proceed with the pay rises as originally proposed by managers as part of the 2015 pay review, noting that, consistent with prior years, not all staff will receive a pay rise."

The memo said bonuses for 2015, due to be paid this year, will not be affected.