NEW YORK - HSBC Holdings chief financial officer Ewen Stevenson said rising inflation could force the bank to significantly raise salaries even as it eyes "brutal" cuts in an attempt to keep a lid on costs.

"We are seeing pretty broad cost inflation," Mr Stevenson said at a financial services conference hosted by Barclays in New York. "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."

Mr Stevenson said that on its current trajectory, HSBC would be about US$500 million (S$697.8 million) short of its cost target next year.

While the bank aims to limit cost growth to no more than 2 per cent, he said it was facing a 6 per cent to 7 per cent rise in underlying costs.

"The only way to take that out, I think, is to be pretty brutal internally on costs," he said.

Both he and chief executive officer Noel Quinn "have a bias to focus on cost control over revenue growth".

"A lot of it depends on the CEO's commitment," said Mr Stevenson. "He has been pretty clear internally that he intends to hit that 2 per cent cost target. So as long as he wakes up every day feeling that, I feel like I am in a good place." BLOOMBERG