BANKERS are set to get bigger bonuses as rising interest rates saw HSBC more than double its profits to £17 billion in the first half of the year, it was revealed today.

The lender, which paid £3.4bn in bonuses to top-performing bankers last year, said it has set aside £157 million more for “performance-related pay” as it reported a major increase in its pre-tax profits. 

Its earnings are likely to get a further boost after the Bank of England is expected to increase rates to 5.25 per cent tomorrow.

Rising interest rates have allowed banks to charge borrowers more for loans and mortgages on top of sky-high inflation and energy bills.

HSBC said it had slightly increased the amount it has put aside to cover losses linked to customers falling behind on loan and mortgage payments to £1bn in the first half of the year.

While the group makes most of its revenue in Asia, its ring-fenced British bank made about a quarter of the group’s £14.3bn worth of net interest income — the difference between what the bank charges borrowers and what it pays out to savers — in the first half of 2023.

HSBC group chief executive Noel Quinn insisted it was “trying to get the balance right between savings and mortgages.”

But a Momentum spokesman said: “There is no greater example of our grotesquely unequal economic model than mega bank profits, while millions struggle to make ends meet in a cost-of-living crisis. 

“We all know the Tories will do nothing to put a stop to this injustice — but a Labour Party true to its values, would introduce a bank windfall tax, rein in the City of London and make finance work for people and planet, not profit.”

Positive Money co-executive director Fran Boait said: “Make no mistake: the growth in HSBC’s profits is a direct result of the higher interest rates its suffering customers are struggling to pay on their loans.

“We’ve seen a staggering lack of leadership from the government, who’ve been too slow to make banks pass higher rates on to savers.”

She called on the government to tax the “unearned profits that banks are making off the backs of workers.”

She said: “If the government wants to restore trust in its abilities to rule in the public’s best interests, it should take a leaf out of Thatcher’s book and tax the unearned profits that banks are making off the backs of workers.”

Harriett Baldwin MP, chair of the treasury select committee, said: “This morning, we have further evidence that high street banks are making hay out of high interest rates while still offering little to loyal savers.

“The FCA (Financial Conduct Authority) promised action yesterday under the Consumer Duty and we will be monitoring progress carefully.

“This isn’t just important to savers, it is important to the whole economy.”

The City regulator this week promised to take “robust action” against banks that do not reflect the rising interest rates in the savings market.

The FCA told the Morning Star it did not comment on individual firms.