Gulliver 'sorry' for HSBC mistakes
HSBC boss Stuart Gulliver has apologised for "the mistakes of the past" as the banking giant set aside a further 1.5 billion US dollars (£950 million) to cover the cost of mis-selling claims and a money-laundering scandal in the United States.
The bank said it increased its provision to cover mis-sold payment protection insurance (PPI) by 537 million US dollars (£341.6 million) in the three months to June, bringing the total charge to date to 1.7 billion US dollars (£1.1 billion).
HSBC also took a 237 million US dollar (£150 million) hit for mis-selling complex financial products known as interest-rate swaps to small businesses, while it has set aside 700 million US dollars (£445 million) to deal with money-laundering penalties.
Mr Gulliver said: "We are profoundly sorry for our mistakes and are committed to putting them right."
The wave of provisions threatened to overshadow better-than-expected first-half results, which showed a 3% dip in underlying pre-tax profits to 10.6 billion US dollars (£6.7 billion) and a 3% rise in net operating income to 36.9 billion US dollars (£23.5 billion).
Earlier this month, a Senate investigation revealed that HSBC had inadvertently allowed rogue states and drugs cartels to launder billions of pounds through its US arm.
The bank warned that the total amount of fines and penalties levelled against it could be "significantly higher" than the 700 million US dollars (£445 million) set aside so far.
The findings, which accused HSBC of ignoring warnings and breaching safeguards that should have stopped the laundering of money from Mexico, Iran and Syria, led to the resignation of head of compliance David Bagley.
The revelations heaped pressure on Business Minister Lord Green, who was chairman of HSBC at the time the failings took place.
Mr Gulliver added: "It is right that we be held accountable and I apologise for our past shortcomings." He went on: "HSBC is now run and managed as a genuinely global firm, making it easier to set, monitor and enforce standards."
