HSBC issues new shares to meet bonus payments

HSBC is issuing £1.7bn of new shares to meet bonus payouts and awards to its 300,000 staff ahead of the publication of its full year results on Monday. By issuing the 300m shares - 1.6% of its existing shares - the bank is also adding to its capital cushions, a move that is encouraged by the Financial Services Authority. Not all of the shares will be used to pay its UK staff or to fulfil a new bonus scheme where the bank is issuing shares that it sells immediately to hand cash to its UK staff. Companies are permitted to extend their share capital by 10% over 10 years to pay their staff.