HSBC 'allowed money laundering'
Lax controls at HSBC allowed Mexican drug cartels to launder billions of dollars through the bank's US operations, an investigation has found.
The report by a US Senate committee also claimed that HSBC provided banking services to some lenders in Saudi Arabia and Bangladesh believed to have helped fund al Qaida and other terrorist groups.
HSBC executives are expected to offer a formal apology for the failings when they appear before a Senate hearing later on Tuesday.
It said in a statement: "We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong."
The report found that HSBC, which is among the 10 largest banks in the US, moved billions of dollars of cash from its affiliate in Mexico to the US, despite warnings that such sums could involve drugs proceeds. US officials believe drug cartels laundered money through the bank's US division between 2002 and 2009.
Carl Levin, chairman of the Senate investigations panel, said: "In the age of international terrorism, drug violence in our streets and on our borders, and organised crime, stopping illicit money flows that support those atrocities is a national security imperative."
Mr Levin also criticised the federal agency supervising the bank's US operations, saying it "tolerated" HSBC's weak controls against money laundering.
The bank added that it has changed its senior management and moved to strengthen its compliance with rules to prevent money laundering.
The US Justice Department is conducting a criminal investigation into HSBC's operations but has not said whether the bank is in settlement talks.