Reuters: Regulatory News: UPDATE 2-HSBC sets aside $2 bln for US investigation, mis-selling

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 2-HSBC sets aside $2 bln for US investigation, mis-selling Jul 30th 2012, 09:58 Mon Jul 30, 2012 5:58am EDT * $700 million provision for U.S. law enforcement, regulatory issues * CEO says eventual costs could be significantly higher * $1.3 billion set aside to compensate UK customers for mis-selling * CEO apologises for money laundering mistakes * Shares up 0.7 percent By Steve Slater and Matt Scuffham LONDON, July 30 (Reuters) - HSBC's chief executive apologised on Monday for shameful and embarrassing mistakes made on anti-money laundering controls as the bank set aside $2 billion to cover the cost of U.S. investigations and compensate UK customers for mis-selling. Europe's biggest bank reported a 3 percent dip in underlying profit and said it had made a provision of $700 million to cover "certain law enforcement and regulatory matters" after a U.S. Senate report this month criticised HSBC for letting clients shift funds from dangerous and secretive countries. The report criticised a "pervasively polluted" culture at the bank and said that HSBC's Mexican operations had moved $7 billion into the bank's U.S. operations between 2007 and 2008. "What happened in Mexico and the U.S. is shameful, it's embarrassing, it's very painful for all of us in the firm," Chief Executive Stuart Gulliver told reporters on a conference call, adding that the eventual costs could be "significantly higher". "We apologise for our past mistakes in relation to anti-money laundering controls, and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively," Gulliver said. Analysts had said the U.S. investigations could result in a fine of about $1 billion. HSBC is also one of several banks being investigated in a global interest rate rigging scandal that has rocked the sector. Gulliver said it had submitted information to regulators but it was far too early to say what the outcome would be or to estimate the potential cost for the bank. HSBC has set aside $1.3 billion to compensate UK customers for mis-selling loan insurance to individuals and interest rate hedging products to small businesses. The bank reported a pretax profit of $12.7 billion for the six months to the end of June, up 11 percent on the year and above an average analyst forecast of $12.5 billion, according to a poll by the company. But underlying profit, stripping out gains from U.S. assets sales and losses on the value of its own debt, was down 3 percent on the year to $10.6 billion. Shares in HSBC were up 0.7 percent to 534.6 pence at 0910 GMT, lagging a 1.8 percent rise in Europe's bank index. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions