HSBC may face criminal charges over rule breachesNovember 5, 2012 - 15:03 AMT PanARMENIAN.Net - A U.S. fine for anti-money laundering rule breaches could cost HSBC significantly more than $1.5 billion and is likely to lead to criminal charges, Europe's biggest bank said on Monday, Nov 5, according to Reuters. HSBC said the U.S. investigation had caused "considerable reputational damage" and had forced it to set aside a further $800 million to cover a potential fine to cover breaches in anti-money laundering controls in Mexico, adding to $700 million put aside in July. "It could be significantly higher," Chief Executive Stuart Gulliver told reporters on a conference call, saying the latest provision was based on discussions with the various U.S. authorities involved in the probe. The timing of any settlement is in the hands of regulators. "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," the bank said in its results. A U.S. Senate report in July said HSBC had let clients shift potentially illicit funds from countries such as Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria. "The report undoubtedly caused considerable reputational damage to HSBC. The extent to which that has resulted in loss of business is hard to measure, but it has undoubtedly damaged our brand," Gulliver said. He said a number of staff had left the firm as a result of the investigation and a number had had pay clawed back. The issue marks another blow for the reputation of British banks, after rival Barclays was fined $450 million in June for rigging Libor interest rates and the industry has had to set aside more than 10 billion pounds to compensate UK customers for mis-selling insurance products. HSBC Chairman Douglas Flint will appear before UK lawmakers investigating culture and standards later on Monday. He appears alongside new Barclays CEO Antony Jenkins and Santander UK boss Ana Botin at 1600 GMT. HSBC reported an underlying profit - after stripping out the impact of disposals and changes in the value of its own debt - in the July-September quarter of $5.0 billion, up from a revised $2.2 billion a year earlier. Underlying operating expenses rose by 16 percent during the quarter compared with the year before, HSBC said. It said it is paying $200 million to $300 million more each year to meet tougher regulation and improve its U.S. compliance measures, adding to pressure on Gulliver to deliver on a promise to cut costs to below 52 percent of revenues. The firm's underlying cost/income ratio came in at 63.7 percent in the third quarter. Gulliver admitted getting to his 48-52 percent target was "proving challenging", but said he remained committed to delivering it by the end of 2013. HSBC took another $353 million charge for mis-selling in Britain, mainly for payment protection insurance. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Titus, Bilirakis lead legislation to sanction Azerbaijani war criminals Representatives Dina Titus (D-NV) and Gus Bilirakis (R-FL) have introduced the bipartisan legislation. Azerbaijan must respect human rights, Scholz tells Aliyev German Chancellor Olaf Scholz has called for greater respect for human rights in Azerbaijan. Armenia: Defense Ministry warns against involving army in political processes The Ministry’s statement came after a video surfaced online, showing soldiers joining the protests in Tavush. Scholz hopes Armenia-Azerbaijan peace treaty will be signed this year German Chancellor Olaf Scholz hopes that a peace treaty between Armenia and Azerbaijan will be signed this year. |