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HSBC costs rise $1.5bn for PPI claims and FCA probe

by: Samantha Partington
  • 03/11/2014
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HSBC's operating expenses rose by $1.5bn in the nine months to 30 September largely due to provisions set aside for Payment Protection Insurance (PPI) complaints and a foreign exchange investigation by the regulator.

Its interim management statement showed the total provision set aside to compensate UK customers for the period was $701m compared to $428m for the same period last year.

A large part of the increase, $589m, was due to more money set aside to settle complaints arising from the mis-selling of PPI policies in previous years.

The bank has set aside $378m to pay for the cost of an ongoing Financial Conduct Authority investigation into foreign exchange.

The bank’s revenue took a $580m hit owing to a provision set aside for the ongoing review of compliance with the Consumer Credit Act.

The impact on HSBC’s underlying profit before tax was a 6% fall to $16.9bn as at 30 September compared to $18.01bn in 2013. The quarterly underlying profit fell from $673m to $28m.

Globally mortgage lending stood at $2.397bn for the period almost static compared to the same period in 2013 at $2.389bn.

The Council of Mortgage lenders ranked HSBC fifth in a table for gross mortgage lending in the UK as at the end of 2013 with £14.5bn and an 8.2% share of the market.

HSBC launched into the intermediary mortgage market in October announcing it would distribute mortgages soley through Countrywide to begin with. 

 

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