HSBC to set aside another £500 mn for penalties over money laundering
05 November 2012
HSBC is to earmark another £500 million to cover fines for alleged money laundering by its US arm when the bank releases its third-quarter results today.
The provision is over the £445 million allocated by the bank in July to cover punishments by US regulators.
The development would come as deeply embarrassing for chief executive, Stuart Gulliver, who has tried to distance HSBC from scandal-hit rivals since assuming the top post last year.
The UK's most valuable bank, known for its financial strength, burnished its reputation as one of the more conservative financial institutions in the run-up to the collapse of Lehman Brothers in 2008.
However, the lender's US operations, primarily the lender Household, took a massive hit from the sub-prime mortgage crash which plunged the UK listed firm into years of write-offs and regulatory probes.
The revised estimate of the bill for fines and charges by US regulators would underline the growing seriousness of investigations into the activities of the subsidiaries of the UK bank.