Britain’s biggest bank by market value survived the financial crisis with its reputation largely intact but it was dragged through the mud earlier this month by revelations that it inadvertently dealt with terrorist financiers, money launderers and drug cartels.
Its half-year results may make a provision against some of the estimated one billion US dollars (£642 million) costs of the scandal, which has already seen its Mexican arm fined 27.5 million US dollars (£17.7 million). And it may also take a hit ahead of compensation claims for a separate scandal that saw banks mis-sell complex financial products to unwitting small businesses after Barclays made a £450 million provision.
HSBC is also among the big banks to have mis-sold payment protection insurance. Lloyds last week increased its provision for PPI claims by £700 million to £4.3 billion and HSBC, which reported a further £300 million hit in its first quarter, may follow suit.
HSBC last week apologised and its head of compliance David Bagley resigned after US lawmakers accused the London-based bank of failing to apply anti-laundering rules, benefiting Iran, terrorists and drug dealers.
The HSBC affair follows hot on the heels of the Libor interest rate rigging scandal that has brought down top executives at Britain’s Barclays bank — most notably its chief executive Bob Diamond and chairman Marcus Agius.
Regulators are reportedly investigating HSBC, as well as Credit Agricole, Deutsche Bank and Societe Generale, over alleged manipulation of the Libor rate after Barclays was recently fined #290 million over the affair.
Gotta love how big and powerful people have had their integrity eroded away by their own money. It’s rich, isn’t it?
I don’t think I have to write much about this one… It pretty much speaks for itself. I just want to get the details out there.