Belfast Telegraph

HSBC boss apologises for bank's mistakes

By Jamie Grierson

Hsbc boss Stuart Gulliver apologised for "the mistakes of the past" as the banking giant set aside a further $1.5bn (£950m) to cover the cost of mis-selling claims and a money-laundering scandal in the US.

The bank said it increased its provision to cover mis-sold payment protection insurance (PPI) by $537m (£341.6m) in the three months to June, bringing the total charge to date to $1.7bn (£1.1bn).

HSBC also took a $237m (£150m) hit for mis-selling financial products known as interest-rate swaps to small businesses, while it has set aside $700m (£445m) 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 $10.6bn (£6.7bn) and a 3% rise in net operating income to $36.9bn (£23.5bn).

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 $700m (£445m) set aside so far.

The findings, which accused HSBC of 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.