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HSBC sets aside £237m for forex probe

HSBC has set aside £237m to cover the costs of an FCA investigation into the manipulation of foreign exchange markets.

The bank is the latest to make a provision in relation to the regulator’s forex investigation, after Royal Bank of Scotland set aside £400m and Barclays allocated £500m.

HSBC has also allocated a further £353m for redress over missold payment protection insurance, up from the £268m it set aside this time last year. The bank has now allocated more than £2.5bn in redress relating to PPI misselling.

In its interim management statement, published today, HSBC says: “Discussions are ongoing with the FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank’s systems and controls relating to one part of its spot FX trading business in London.

“Although there can be no certainty that a resolution will be agreed, if one is reached the resolution is likely to involve the payment of a significant financial penalty. We continue to co-operate fully with regulatory and law enforcement authorities in the UK and other jurisdictions.”

Group pre-tax profits rose 2 per cent from £2.84bn in Q3 2013 to £2.89bn in the three months to 30 September.

HSBC Group chief executive Stuart Gulliver says: “Despite the rising regulatory expectations, I am confident our business model remains sustainable and that we can deliver further value for our shareholders while meeting our obligations and protecting the future of HSBC.”

In August, the company reported half-year pre-tax profits of £7.3bn, down 13 per cent from £8.4bn a year earlier, owing to “unprecedented” regulatory pressures.

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