Chairman warns about impact of limit on bonuses being pushed through by EU, as China slowdown hits bank's profit growth

HSBC is considering raising its bankers' salaries around the world in response to the EU's cap on bonuses, which it fears could damage its business.

Chairman Douglas Flint warned about the impact of the limit on bonuses – which from January next year will be capped at 100% of salary, or 200% with special approval from shareholders – as the UK's largest bank disappointed investors with rise in profit to $14.1bn (£9.2bn) in the first half of 2013, up 10% on the same period in 2012.

A slowdown in the previously fast-growing emerging markets and lower than expected revenues led to a slide of more than 4% in its shares, making it the biggest fall in the FTSE 100.

HSBC also warned that it could face significant fines or penalties as part of the ongoing investigation into rigging of Libor that has already led to fines at Barclays, Royal Bank of Scotland and the Swiss bank UBS.

Speaking from Hong Kong, Flint said one of the options being considered to tackle the bonus cap was a potential pay rise for staff and he said he was confident that shareholders would support policies intended to keep the bank competitive.

"We are looking at a whole range of things," he said.

Even so, he said that concerns about the bonus cap were unlikely to force HSBC to move its headquarters from the UK, where it has been based since buying Midland bank in the 1990s.

"You can see from these results that 80% of the profit comes from outside Europe. We have to be competitive. The cap on variable pay as a proportion of fixed pay is very uncomfortable when we make our money where these restrictions are not faced by our competitors," said Flint.

He said the cap was not supported by the government or the new banking regulator, the Prudential Regulation Authority (PRA), and "could have a highly damaging impact on our competitive position in many of our key markets, including those outside Europe".

Flint added: "We will therefore be consulting on how best to achieve this aim [of paying competitively] while seeking to preserve the essence of the remuneration framework supported by shareholders two years ago."

Andrew Bailey, the chief executive of the PRA, has previously warned MPs that salaries across the City could rise by around £500m as a result of the cap on bonuses which is expected to affect so-called code staff, currently defined as those earning more than €500,000 (£420,000).

Royal Bank of Scotland last week cited the bonus cap as one factor it would need to consider when setting the pay for its chief executive, Ross McEwan, who takes over from Stephen Hester on 1 October.

HSBC has previously had the support of shareholders on its pay policies, which require top executives to hold any shares they are awarded until retirement, longer than rival banks. Flint said the report by the parliamentary commission on banking standards published in June was hard-hitting and uncomfortable to read, but he warned that some of its recommendations will have unintended consequences.

A year ago, the bank's half-year results were dominated by the systems breakdowns that failed to stop the bank laundering money for terrorists and drug barons – an episode Stuart Gulliver called "shameful". The bank is subject to a stringent non-prosecution agreement with the US authorities, and said Michael Cherkasky, appointed as the formal monitor for the next five years, had begun his role on 22 July. Cherkasky is a former prosecutor in New York county.

As is the case for many other banks, HSBC is also facing action from the US Federal Housing Finance Agency over securitisations of mortgages and admitted that it could receive claims for damages of as high as $1.6bn.

Gulliver has pulled HSBC out of 54 businesses since he became chief executive in 2011, and cut staff by more than 40,000 to 259,000. He expects the bank to eventually employ around 240,000.

He said growth in mainland China was slowing, and forecast expansion of 7.4% in 2013 and 2014. The economy grew at a rate of 7.5% in the second quarter of 2013. "There is wishful thinking in the west that China is slowing down in an uncontrollable way. We don't see it," said Gulliver.

The pace of profit growth slowed in North America and Latin America – where Brazil and Mexico weighed on the total – to 4.7% and 3.3% respectively but was 36% higher in Asia Pacific, 30% in Hong Kong and 20% in Europe. In the UK, HSBC took another provision for mis-selling of payment protection insurance – the largest ever mis-selling scandal in the UK – of $367m (£239m).