HSBC is reportedly reviewing a perk that covers school fees for bankers in Hong Kong as part of a major overhaul under its chief executive, Georges Elhedery. Europe's largest bank is considering whether to scrap the benefit for new employees or adjust total compensation, according to Bloomberg News. No final decisions have been made.
Scope of the subsidy
Hundreds of mid- and top-level staff in Hong Kong, HSBC's biggest market, benefit from a subsidy covering 95% of annual school fees up to HK$220,000 (£20,700) per child in primary school and HK$300,000 per child in secondary school. This perk costs the lender tens of millions of dollars annually and is not available in its other global hubs, reportedly causing tension at its London headquarters. It is also not offered to staff of Hang Seng Bank, which HSBC fully acquired in January for £10 billion.
Context of rising fees
International school fees are a significant expense for families in Hong Kong, with costs rising since the Covid pandemic. Hong Kong's largest international school group, the English Schools Foundation, plans to raise tuition fees by an average of 4.1% for most primary and secondary schools next academic year, adding HK$600 to HK$720 per month.
Elhedery's strategic overhaul
Elhedery, who took over in 2024, has embarked on a shake-up including deep cost cuts, exiting certain markets, and splitting operations into eastern and western markets. This briefly prompted rumours of an HSBC break-up, later quashed. In a recent interview, Elhedery said he is “ruthless about killing complexity” to make the lender simpler and more agile.
Focus on Asia
HSBC generates most of its profits in Hong Kong and China and is doubling down on Asia with the Hang Seng acquisition. It has reportedly pushed Hang Seng to shed bad debts linked to the property market. HSBC, founded in 1865 as the Hongkong and Shanghai Banking Corporation Ltd, is the largest bank in Hong Kong and one of three note-printing lenders.
An HSBC spokesperson said: “We are focused on rewarding our employees fairly and competitively, on the basis of their performance. HSBC employees in Hong Kong have access to broad professional development opportunities and a competitive pay and benefits package.”
