The rising tide of financial penalties among Britain’s banks continued to swell today as HSBC revealed additional charges for money-laundering breaches and mis-sold payment protection insurance (PPI).
Europe’s largest bank said it had set aside an additional $800 million (£500m) to cover fines from US authorities that accused it of inadvertently allowing rogue states and drug cartels to launder billions of pounds through its US arm.
HSBC has now set aside $1.5 billion to cover the potential scandal but warned no agreement has been made and the cost could be “higher, possibly significantly higher”.
Meanwhile, the lender said it had taken an additional $353m to cover compensation, mainly for mis-selling PPI, pushing its total bill to more than $2bn.
The additional penalties, as well as the impact of the value of its own debt, triggered a 51 per cent slide in the bank’s reported pre-tax profits for the three months to 30 September to $3.5bn.
Chief executive Stuart Gulliver said: “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.”
The third-quarter results season has been dominated by the escalating provisions made by banks such as Barclays, Lloyds and RBS to cover mis-sold PPI and comes hot on the heels of the Libor-fixing scandal.