HSBC dragged into forex probe, reveals profits jump
AGENCE FRANCE PRESSE, 04 November 2013
LONDON: A worldwide probe into suspected rigging of foreign exchange deals has reached Europe’s biggest bank HSBC, the bank revealed when it also announced a jump in quarterly profits.
The London-based bank said in its earnings statement that British regulator, the Financial Conduct Authority, is conducting investigations alongside several other global agencies into a number of firms, including HSBC, “relating to trading on the foreign exchange market”.
HSBC said it was “cooperating with the investigations which are at an early stage”.
It comes as the British bank announced a 28-percent increase in net profit to $3.2 billion (2.37 billion euros) during the three months to the end to September on major cost-cutting and lower bad debt charges.
HSBC had posted profit after tax of $2.5 billion in the third quarter of 2012.
“Revenue was stable in the third quarter (of 2013), influenced by the mixed global macroeconomic picture,” HSBC chief executive Stuart Gulliver said in a statement.
“Our home markets of the UK and Hong Kong contributed more than half of the group’s underlying profit before tax.”
Gulliver added: “Hong Kong continues to benefit from its close economic relationship with mainland China. We remain well positioned to capitalise on improving economic conditions in these markets.”
HSBC said it would continue to focus on reducing its cost base after savings of $400 million over the third quarter and total cuts since the start of 2011 of $4.5 billion.
“This is well in excess of the target we set out to achieve by the end of 2013. We re-invested part of these savings in risk and compliance, increasing headcount by 1,600 since December 2012,” Gulliver said.
HSBC was guilty of a “blatant failure” to implement anti-money laundering controls and wilfully flouted US sanctions, American prosecutors said, as the bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it allowed terrorists to move money around the financial system.