HSBC has increased its bankers’ bonus pool and announced fresh shareholder payouts after profits grew more than fourfold in the second quarter, thanks to an economic rebound in key markets, including the UK. The London-headquartered bank said it had raised the amount on offer to compensate its star staff by $900m in the first half of the year, compared with a $600m increase during the same period in 2020, when its profits suffered from the onset of the Covid-19 crisis. Its top bankers will have another six months to increase the bonus pool even further before it is paid out next spring. Last year, HSBC paid 324 of its bankers more than €1m (£854,000), including bonuses, while eight received more than €5m. One unnamed banker was given between €9m and €10m, roughly double the £4.2m paid to its chief executive, Noel Quinn, for 2020. HSBC said the bonus boost reflected its strong performance, as pre-tax profits swelled to $5bn in the three months to 30 June, up from $1bn a year earlier, when it put aside billions of pounds to cover potential loan defaults linked to the pandemic. Improving economic forecasts, particularly in the UK, meant HSBC could release $284m worth of loan loss provisions, compared with the $3.8bn it had put aside to cover potential bad debts during the same period in 2020. “The UK economy has rebounded strongly in the first half of this year,” Quinn said. “Much credit must go to the vaccination programme that is supporting the UK economy rebound, and the UK government has done well in getting such a high coverage of vaccination. So it is encouraging and we’re positive about the second half of the year for the UK economy.” However, HSBC said uncertainties still remain, “as countries respond at different speeds, government support measures unwind and new virus strains test the efficacy of vaccination programmes”. Despite the uncertainty, the bank confirmed that it would pay its investors a dividend worth seven US cents a share, making it the latest UK lender to take advantage of looser Covid rules around shareholder payouts. The Bank of England ordered the UK’s largest banks not to pay cash bonuses to senior staff and to suspend dividend payments last year to preserve capital and ensure that lenders could support the British economy in case of a big economic downturn. “These are good results that reflect the return of growth in our main markets and marked progress in the execution of our strategy,” Quinn said. In the UK, Quinn said HSBC experienced a record quarter for mortgages, with lending having grown a total of 9%, or $5.1bn, since June last year. It helped push overall mortgage lending up 7% during the year to $24bn across the entire group. The mortgage lending figures cover the final months of the temporary stamp duty holiday, which was introduced to support the UK housing market during the Covid-19 crisis but contributed to rising house prices that forced some borrowers to take out larger home loans. UK house prices hit a new high in June and were 30% higher than the peak they reached before the 2008 financial crisis, according to Zoopla. The stamp duty waiver has ended in Wales and Scotland, and has been lowered in England and Northern Ireland before it is wound up in September. HSBC said it expects UK GDP to grow by 6.1% in 2021, with the unemployment rate reaching an average of 5.8% by the end of the year. It forecasts that annual house prices will jump by 8.3% on average. The bonus increase at HSBC comes as Treasury officials discuss the possibility of lifting the cap on banker bonuses, which has been in place since 2014 and limits payouts to two times an employee’s salary. It is reportedly seen as a way to make London more attractive for senior bankers, helping the City compete with the EU’s other financial centres, including Dublin and Paris, according to the Times. However, the Guardian understands that ministers are conscious about “the post-pandemic environment” and the optics of allowing bankers to earn more while many people still suffer the effects of the economic downturn. Any decision on the matter would be made by the Bank of England’s Prudential Regulation Authority. However, Luke Hildyard, a director of the High Pay Centre, said that banks should improve their training and development if they are struggling to fill key roles, rather than throwing more money at senior staff. “Lavishing vast sums of money to attract more overseas bankers to Britain will do nothing for the wider economy while exacerbating one of the widest divides between rich and poor in Europe,” he said. This article was amended on 2 August to remove a reference to HSBC’s bonus pool increasing by 50%