HSBC in clear over US arm

HSBC will not face any further action for money-laundering in Mexico after American authorities agreed to drop their threat of prosecution.

The tainted bank was fined £1.2bn in 2012 for handling dirty cash from drug lords, and only just escaped criminal proceedings. Investigators warned they would take it to court for the debacle if it did anything else wrong – putting HSBC at risk of losing its dollar banking licence.

But this so-called deferred prosecution agreement has now ended, following a £750m push by the bank to clean up its act. The US Department of Justice has said it will file a motion with the court for the eastern District of New York to dismiss the charges, rather than seeking to extend the DPA beyond its initial five-year term. It presents Mark Tucker and John Flint, HSBC’s new chairman and chief executive, with an opportunity to turn over a new leaf.

Traders cheered the deal yesterday, sending shares up 2.5pc or 18.5p to 751.7p and adding £2.9bn to the value of the business. The agreement also allows previous chairman Douglas Flint and Stuart Gulliver – who will stand down as chief executive in February – to escape with some dignity intact.

When Gulliver took over in 2011, he pledged to encourage a culture of ‘courageous integrity’ and said his time at the top would be judged on whether the bank was ‘seen as a moral and decent firm’. But the bank has since been sucked into a string of scandals with senior staff jailed for currency rigging and allegations it helped tax evaders in Panama and Switzerland.