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HSBC bill for money laundering may top $1.5bn
Britain’s largest bank HSBC has set aside an extra $800m to cover settlements for breaching anti money-laundering rules in the US.
The bank, which had already set aside $700m to cover the scandal, outlined the extension in its third-quarter results.
Stuart Gulliver, HSBC’s chief executive, warned shareholders the financial penalties could be significantly higher as the firm has yet to agree a settlement with the US authorities.
“The third quarter results include an additional provision of $800m in relation to the ongoing US anti-money laundering, Bank Secrecy Act and Office of Foreign Assets Control investigations,” he said.
“We are actively engaged in discussions with US authorities to try to reach a resolution, but there is not yet an agreement.
“Indeed, the final amount of the financial penalties could be higher, possibly significantly higher, than the amount accrued.”
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The settlement relates to inadvertent breaches by HSBC of anti-money laundering procedures in its Mexican operations.
It is one of the largest punishments ever meted out to a British bank.
HSBC is understood to have held talks with US authorities over the past few months to settle the claims, which came to light following a year-long investigation by a US senate committee.
The Senate Committee on Homeland Security branded HSBC as having been “pervasively polluted for a long time” by allowing funds to be moved to and from its US branches to countries including Mexico, Syria, the Cayman Islands, Iran and Saudi Arabia.
HSBC reported a profit before tax of $3.5bn in the third quarter, down from $3.7bn in Q3 2011. It also suffered another $353m charge for UK mis-selling, mainly for payment protection insurance.