HSBC puts aside £358m for potential fines

HSBC has set aside £358 million (US $550 million) for financial penalties from global regulators relating to ongoing foreign exchange rate investigations.

HSBC has set aside £358 million (US $550 million) for financial penalties from global regulators relating to ongoing foreign exchange trading investigations.

The bank – which today reported a 17% drop in profits to £12.2 billion (US $18.7 billion) – acknowledged ongoing global investigations could result in fines and penalties, which it said could be “significant”.

The decision to ringfence the cash comes after regulatory settlements with the Financial Conduct Authority in the UK and the US Commodity Futures Trading Commission after investigations of HSBC’s trading activities.

HSBC paid £216 million to the FCA and a civil monetary penalty of US $275 million to the CTFC last year.

In a statement in investors, the bank said: “The remaining investigations and reviews in the UK, the US and elsewhere are ongoing.  Based on the facts currently known, there is a high degree of uncertainty as to the terms on which they will be resolved.”

The bank added that the Hong Kong Monetary Authority had in December 2014 completed its investigation into the FX trading operations of a subsidiary with no evidence of market manipulation found.

There are also ongoing proceedings against the bank in the US relating to benchmark manipulation as a result of class actions that have been filed in the New York District Court.

Today’s news comes after several weeks of negative headlines for HSBC relating to its tax planning and mitigation services offered by some of its European subsidiaries.

 

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