HSBC Prepares for Penalties
Kilzer, Lou, Tribune-Review/Pittsburgh Tribune-Review
HSBC Holdings Plc, the London-based international bank accused of helping terrorists, drug lords and criminals launder money through secret bank accounts by engaging in lax compliance, on Monday set aside $2 billion toward anticipated fines and repayments.
The figure includes $700 million for expected U.S. fines from the Department of Justice. A Senate committee report alleged that HSBC's lax compliance helped make it possible for Mexican drug lords to launder $7 billion a year and for U.S. sanctions against Iran to be thwarted through the use of secret bank accounts.
"It is right that we be held accountable, and I apologize for our past shortcomings," CEO Stuart Gulliver said in a prepared statement as part of the bank's 2012 interim financial results.
In a related financial report, HSBC said the $700 million figure for U.S. penalties is "a best estimate."
"There is a high degree of uncertainty in making this estimate and it is possible that the amounts when finally determined would be higher, possibly significantly higher," HSBC said.
The report, which indicated a decline of about 9 percent in profit for the first half of 2012, said the banking industry was "operating in a hostile climate" because of a series of scandals. It said HSBC's role "has added further to public concern."
A Tribune-Review investigation found that secret bank accounts registered in about 70 international …
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Publication information: Article title: HSBC Prepares for Penalties. Contributors: Kilzer, Lou - Author. Newspaper title: Tribune-Review/Pittsburgh Tribune-Review. Publication date: July 31, 2012. Page number: Not available. © 2009 Tribune-Review/Pittsburgh Tribune-Review. Provided by ProQuest LLC. All Rights Reserved.