British banking giant HSBC may consider offering significant pay hikes to its employees in 2023 owing to soaring inflation, reported Bloomberg citing the bank’s CFO Ewen Stevenson.

Stevenson said: “We are seeing pretty broad cost inflation. Half of our cost base is fixed pay.

“We are thinking that we will have to materially step that up again in 2023 relative to 2022.”

The CFO, while addressing a financial services conference hosted by Barclays in New York, said the bank is planning “brutal” cuts as part of its efforts to limit costs.

While HSBC seeks to cap its cost growth to 2%, it is reportedly facing over 7% jump in underlying costs.

According to Stevenson, HSBC’s current trajectory indicates that the bank would be over $500m short of its cost target next year.

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“The only way to take that out, I think, is be pretty brutal internally on costs,” he added.

Further, the CFO said HSBC chief executive officer Noel Quinn’s current focus is on achieving cost control over revenue growth.

Stevenson said: “He (CEO) has been pretty clear internally that he intends to hit that 2% cost target. So as long as he wakes up every day feeling that, I feel like I’m in a good place.”

In March this year, HSBC announced plans to sell its branch operations in Greece to local peer Pancreta Bank for an undisclosed sum. HSBC’s indirect subsidiary HSBC Continental Europe signed the deal, which is part of the bank’s multi-year restructuring plan.