Reuters: Regulatory News: S&P lowers HSBC outlook to negative, cites regulatory issues

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S&P lowers HSBC outlook to negative, cites regulatory issues Aug 23rd 2012, 17:19 Thu Aug 23, 2012 1:19pm EDT Aug 23 (Reuters) - Standard & Poor's lowered its outlook on HSBC Holdings PLC to negative from stable on Thursday, saying that money-laundering allegations against the British bank have left HSBC vulnerable to losing business and facing costs related to regulatory fines and litigation. S&P also reaffirmed HSBC's long-term counterparty credit rating of A+, which is six notches within the investment grade category. The agency said that apparent anti-money-laundering control failures at HSBC that were highlighted in a U.S. congressional report in July have been costly and threatened the bank's trade finance business, particularly in the United States. S&P noted that HSBC has built up $2 billion worth of provisions for regulatory fines and related costs during the first six months of 2012, on top of $1.1 billion worth of provisions last year, but that the extent of U.S. regulatory actions against HSBC "remains uncertain."

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