HSBC takes US$378-m hit for forex scandal
HSBC takes US$378m hit for forex scandal
LONDON, England (AFP) – HSBC bank has taken a US$378 million (302 million euro) charge linked to allegations of foreign exchange market rigging, and posted mixed earnings for the third quarter.
The Asia-focused lender added in a results statement that talks were ongoing with Britain’s Financial Conduct Authority (FCA) regulator over the allegations and warned that a “significant” fine was likely.
The news comes after rivals Barclays and Royal Bank of Scotland last week made huge provisions for possible costs and penalties arising from several probes into suspected price-rigging in the foreign exchange market.
“Discussions are ongoing with the UK FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank plc’s systems and controls relating to one part of its spot FX trading business in London,” the bank said Monday.
“Although there can be no certainty that a resolution will be agreed, if one is reached, the resolution is likely to involve the payment of a significant financial penalty.
“We continue to cooperate fully with regulatory and law enforcement authorities in the UK and other jurisdictions.”
HSBC added on Monday that its earnings after taxation climbed seven percent to US$3.431 billion in the three months to September 30 from a year earlier, boosted by falling impairments.
However, adjusted pre-tax profits sank 12 per cent to US$4.4 billion in the third quarter, as it set aside around US$1.7 billion to cover a series of one-off charges.
HSBC also took a US$701 million provision to compensate customers for mis-sold products and US$550 million for a settlement with the Federal Housing Finance Authority. In addition, restructuring costs were $68 million.
