Arab Today, arab today hsbc earmarks more money for us fines
Last Updated : GMT 18:19:32
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HSBC earmarks more money for US fines

Arab Today, arab today

Arab Today, arab today HSBC earmarks more money for US fines

London - Agencies

HSBC has increased the amount set aside for fines linked to money-laundering in the US to $ 1.5 billion, the British banking giant said, adding it could face criminal charges over the matter. The Asia-focused lender also announced in a results statement that net profits tumbled by more than half to $ 2.498 billion in the third quarter, or three months to September, compared with a year earlier. HSBC’s earnings were hurt by an extra $ 800-million provision over the money-laundering affair. It had already allocated $ 700 million earlier this year and admitted that the overall total could be “significantly higher.” The London-listed bank also took another charge of $ 353 million to compensate clients in Britain who were mis-sold payment protection insurance, in a separate scandal which has blighted the country’s banking sector. HSBC has so far booked a total provision of $ 2.1 billion for the mis-selling scandal. The bank was thrown into a separate crisis earlier this year when a US Senate report found it had allowed affiliates in Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the US without adequate controls. “These results include an additional provision of $ 800 million in relation to US anti-money laundering, Bank Secrecy Act and Office of Foreign Asset Control investigations,” the bank said in Monday’s statement. “We are actively engaged in ongoing discussions with the relevant authorities regarding steps to achieve a resolution, including potential fines, penalties and forfeitures, although no agreement has yet been reached. “The resolution of at least some of these matters is likely to involve the filing of corporate criminal as well as civil charges and the imposition of significant fines, penalties and/or monetary forfeitures,” HSBC added. The bank in July apologized for failing to apply anti-laundering rules and one senior executive resigned. US lawmakers have accused the global bank of giving Iran, terrorists and drug dealers access to the US financial system. David Bagley, the head of group compliance for London-based HSBC, was forced to step down from his post in the wake of a US Senate subcommittee’s damning report on the bank’s operations. “The US authorities have substantial discretion in deciding exactly how to resolve this matter,” HSBC chief executive Stuart Gulliver said. “Indeed, the final amount of the financial penalties could be higher, possibly significantly higher, than the amount accrued.” HSBC on Monday added that the bank’s pre-tax earnings slumped 51 percent to $ 3.5 billion in the third quarter on large fluctuations in the value of its own debt. After stripping out exceptional items, adjusted pre-tax profits more than doubled to $ 5.04 billion, aided by a strong performance at HSBC’s investment banking division, and easing eurozone conditions. Market expectations had been for adjusted profit of about $ 5.45 billion, according to analysts polled by Dow Jones Newswires. Total revenues meanwhile soared by 20 percent to $16.13 billion in the reporting period. The group also slashed bad debts. HSBC’s share price dropped 1.42 percent to 617.20 pence on London’s FTSE 100 index of leading companies, which was 0.60 percent lower at 5,832.52 points in midday deals. From Arab News

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