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HSBC makes £500m provision for money laundering fines

HSBC 480

HSBC has set aside an extra £500m to cover fines relating to money laundering allegations, bringing this year’s total provision to £938m.

The bank’s interim management statement says the bank is in discussions with US authorities about the allegations, but an agreement has not been reached. It warns financial penalties could be “significantly higher” than expected.

The provision contributed to a 4 per cent increase in operating expenses for the third quarter of the year, reflecting increased investment in regulatory and compliance infrastructure and higher litigation costs.

The bank reported pre-tax profits of £2.2bn for the third quarter, down from £2.3bn in the same period last year. Pre-tax profit for the nine months to 30 September was £10.1bn, down from £11.6bn last year.

Group chief executive Stuart Gulliver says: “We continue to execute our strategy to ensure that we are aligned with the key global trends of growth in international trade and capital flows and wealth creation, particularly in faster-growing markets. We have made significant progress in delivering our strategic priorities to simplify, restructure and grow HSBC.

“While subdued economic conditions persist in Europe and other Western economies, we remain confident in our outlook for growth in the emerging world and, particularly, in mainland China, where we continue to expect a soft landing.”

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