Lender pre­pares to face US money laun­der­ing charges

The Pak Banker - - Front Page -

NEW YORK: HSBC Hold­ings Plc, Europe’s largest bank by value, said it’s likely to face crim­i­nal charges over al­le­ga­tions it broke U.S. anti-money laun­der­ing rules and set aside a fur­ther $800 mil­lion to cover the costs of the probe. “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 a state­ment on Mon­day. The Lon­don-based bank also re­ported profit that missed an­a­lysts’ es­ti­mates to­day, and set aside $357 mil­lion to re­dress U.K. cus­tomers who were mis-sold loan in­sur­ance. Chief Ex­ec­u­tive Of­fi­cer Stu­art Gul­liver’s at­tempts to over­haul the bank are be­ing hob­bled by the loom­ing fines and the need to pay back cus­tomers im­prop­erly sold in­ter­est-rate swaps and con­sumer-loan in­sur­ance. To­day’s ex­tra pro­vi­sion brings the bank’s to­tal to $1.5 bil­lion. It set aside $700 mil­lion in July for U.S. fines af­ter a Se­nate com­mit­tee found it had given ter­ror­ists and drug car­tels ac­cess to the U.S. fi­nan­cial sys­tem. “We are ac­tively en­gaged in dis­cus­sions with U.S. au­thor­i­ties to try to reach a res­o­lu­tion, but there is not yet an agree­ment,” Gul­liver said in the state­ment. “The fi­nal amount of the fi­nan­cial penal­ties could be higher, pos­si­bly sig­nif­i­cantly higher, than the amount ac­crued.” HSBC fell as much as 2.7 per­cent in Lon­don trad­ing and was 1 per­cent lower at 620 pence as of 8:50 a.m. in Lon­don. The set­tle­ment for HSBC that reg­u­la­tors and the Man­hat­tan dis­trict at­tor­ney were aim­ing to con­clude as early as Septem­ber may have been slowed when New York’s bank­ing su­per­in­ten­dent ac­cused Stan­dard Char­tered Plc (STAN) of laun­der­ing $250 bil­lion for Iran. Third-quar­ter un­der­ly­ing pre­tax profit rose to $5.04 bil­lion from $2.24 bil­lion a year ear­lier, the lender said in a state­ment, miss­ing the $5.6 bil­lion me­dian es­ti­mate of eight an­a­lysts sur­veyed by Bloomberg. —

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