HSBC Holdings Plc is currently evaluating a long-standing benefit that provides school fee coverage for a significant number of bankers in Hong Kong. This review is part of a wider initiative to reduce costs and standardise employee benefits across the bank’s global operations, sources familiar with the situation told Bloomberg.
The bank is reportedly exploring several options, including the potential removal of the perk for new employees or adjusting overall compensation packages. Although the review has been underway for some time, no final decisions have been reached.
Hong Kong remains the most significant market for the British lender. It is the only major hub where staff at mid-level positions and above receive a subsidy covering 95 percent of school fees. Currently, this benefit provides up to HK$220,000 annually for each child in primary education and HK$300,000 for those in secondary school.
The subsidy, which costs tens of millions of dollars each year, is accessed by hundreds of staff members. Because this benefit is not available in other primary hubs, it has reportedly caused friction with the London head office, Bloomberg reports. Notably, the perk is not extended to employees of Hang Seng Bank Ltd, a Hong Kong-based unit that HSBC recently acquired in full.
A spokesperson for HSBC stated that the bank is committed to rewarding staff fairly based on performance, noting that employees in Hong Kong receive competitive pay and benefits alongside professional development opportunities.
[See more: Hang Seng Bank shareholders approve HSBC’s US$14 billion buyout]
Under the leadership of CEO Georges Elhedery, HSBC is undergoing its most significant restructuring in a decade. This overhaul includes thinning management ranks and cutting thousands of roles. Elhedery recently emphasised his commitment to “killing complexity” to make the organisation more agile.
In Hong Kong’s expensive educational landscape, international school fees represent a substantial cost for families, with annual tuition exceeding HK$260,000 at some elite institutions. Many high-earning residents and expatriates consider these schools essential for their children’s future prospects.
While HSBC’s base salaries sometimes trail those of Wall Street competitors, the bank has traditionally used generous perks, such as cheap mortgages and club memberships, to remain attractive to talent. However, some of these benefits are being phased out; the bank previously eliminated the general manager title, which included extensive insurance coverage.
In February, the bank announced it expects to reach a US$1.5 billion cost-saving target by the middle of this year, ahead of its original schedule. Additionally, HSBC has increased its return on tangible equity targets to 17 percent or higher for the current year and the two following years.
