HSBC staff strike over pay and dole out peanuts

Thousands of HSBC staff walked out in a row over pay yesterday in the first strike in the banking sector for eight years.

The Amicus finance union, which handed out peanuts to shareholders attending yesterday's annual meeting, warned there could be further action.

The union said 3,000 employees had backed the action, but the bank insisted 1,471 had gone on strike - 2.7% of the workforce - and that none of its branches or processing centres had been shut.

In a sign that the bank was concerned about the impact of the stoppage, the head of its UK retail operations, Michael Geoghegan, raced to Manchester to boost morale in local branches as soon as the meeting in London was over.

Senior staff were also targeting other areas of potential activism, such as in south Wales, where the local gen eral manager was visiting sites across the region.

Sir John Bond, the bank's chairman, was harangued about his pay packet of £3.6m at the meeting which one investor said was like "winning the lottery at the weekend as well as during the week".

Sir John told the meeting, which was held for a year in which the bank made £9.6bn of profits, that it was "deeply regrettable" that staff had voted to strike. "It is in essence ... a dispute about HSBC's policy of paying market rates and rewarding performance," Sir John said.

The union argued that 10% of staff received no pay rise and a further 45% will get below inflation increases. Mr Geoghegan revealed he had decided to implement the proposals put to the union at aborted talks at Acas earlier in the week. These will see a modification to the bonus scheme and a cash payment in December to staff who have not received a salary increase for two years and who improved their customer service performance.

One shareholder and employee described Sir John's pay as "absolutely marvellous". "I hope you can sleep at night because I know people who can't sleep at night be cause they can't pay their bills," the shareholder said.

Rob O'Neill, the Amicus general secretary, also addressed the meeting and said that even if the strike was a "total failure" the issue that had caused the strike would not go away.

During a meeting that was ill-tempered at times, another shareholder accused Sir John of "corporate greed" and called on him to limit his pay. Sir John repeatedly told the meeting that his pay was set by the board's remuneration committee and that he was aware of how well paid he was as he started his career working in a branch on £26 a month.

Sir John was asked about the bank's experience of bad debts after Barclays' warning earlier this week that customers were missing payments on their Barclaycards. Sir John said that there was a "noticeable and marked but manageable increase" in bad debts.

All the resolutions at the meeting were passed with barely any dissent although the votes in favour of the remuneration report dipped to 94%.

The bank's shares fell 2p at 868p.