Ethical Performance
inside intelligence for responsible business


HSBC faces $1.5bn laundering fine

December 2012

UK-headquartered bank HSBC expects to pay a fine of at least $1.5bn (£940m, €1.18bn) to the US authorities for breaches of money laundering rules.

This follows a Senate report, published in July, that condemned a ‘pervasively polluted’ culture that allowed clients to shift potentially illicit money into the US.

It said HSBC helped a Saudi bank linked to al-Qaida to switch large sums to the US and enabled Mexican drug cartels to transfer $7bn in 2007 and 2008. Other suspect fund transfers, it said, originated from the Cayman Islands, Iran and Syria.

The fine could be followed by corporate criminal and civil charges.

A number of staff have left HSBC as a result of the investigation and, in some cases, the bank has clawed back pay.

Since the tainted money transfers, HSBC has shed almost 30,000 jobs, partly because of disposals, and more staff cuts are likely before the end of next year.

The bank has called the criticism ‘shameful and embarrassing’. CEO Stuart Gulliver said: “There’s a whole series of things that came from probably a decade in the 2000 to 2008-09 period that have surfaced now that the industry needs to sort out, remediate and make sure doesn’t happen again. It will take a chunk of time to clean the system and then it will take a little bit longer than that for trust to be restored more fully.”

This latest laundering episode has dealt another blow to the reputation of UK banks.

Barclays was fined $450m in June for rigging the inter-bank lending rate (EP, July 2012, p1), and the banks collectively have had to set aside more than £12bn for customers to whom they mis-sold payment protection insurance. HSBC itself has estimated its eventual compensation bill could exceed £1.3bn.

In spite of these calls on its finances, HSBC has reported underlying profits of $5bn for the 2012 July-September quarter, more than double its £2.2bn revised figure a year earlier.

HSBC | UK & NI Ireland |

3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter