Belfast Telegraph

Spanish judge opens money-laundering probe into seven ex-HSBC executives

Spain's National Court has said it is investigating seven former HSBC executives as part of a money-laundering and organised crime probe.

The investigation relates to HSBC's Swiss banking unit, which has come under scrutiny in several countries after leaked documents suggested it helped wealthy individuals around the world dodge taxes.

Judge Jose de la Mata ruled on Thursday to investigate the Swiss banking unit's chairman, Peter Widmer, as well as Clive Bannister and Christopher Meares, who were chief executives in 2006 and 2007 respectively, and four more employees.

The judge found evidence that the executives worked with Banco Santander and BNP Paribas to transfer funds until at least 2008 to avoid tax in Spain.

The case came to light after Herve Falciani, a former HSBC IT worker turned whistleblower, gave data to French tax authorities in 2008. France then shared it with Spanish authorities and other governments.

HSBC declined to comment.

The news came on the day HSBC reported a 19% slump in first quarter profits.

The British lender said the fall to 5 billion US dollars (£3.8 billion) reflected a change in the accounting of the fair value of its debt.

However, the figure was still ahead of expectations, and adjusted pre-tax profits rose 12% to 5.9 billion US dollars (£4.5 billion) as the bank was boosted by improved trading and rising interest rates.

Adjusted revenue edged 2% higher to 12.8 billion US dollars (£9.9 billion), helped by growth in current accounts, savings and deposits.

The bank's London-listed shares rose 3.5% in afternoon trading as investors welcomed the figures.

Chief executive Stuart Gulliver said: "This is a good set of results. The increase in adjusted profit was driven by strong performances in three of our four global businesses.

"Global banking and markets had a great quarter, commercial banking delivered higher revenue from our liquidity and cash management activities, and retail banking and wealth management was supported by rising interest rates and renewed customer investment appetite."

Mr Gulliver also flagged progress on HSBC's cost-cutting programme, through which it aims to save around 6 billion US dollars (£4.8 billion) a year.

The results came after the bank revealed in February that it was facing a UK investigation over money-laundering controls and posted a worse-than-expected 62% full-year profits slump.

The lender said the Financial Conduct Authority (FCA) launched a probe at the end of last year into its financial crime compliance, with the group remaining under pressure on both sides of the Atlantic after its £1.2 billion US money-laundering fine nearly five years ago.

HSBC is one of a number of banks considering relocating jobs to the continent after the Brexit vote, having said that 1,000 jobs may have to move from London to Paris over the next two years depending on the outcome of negotiations.

The trading update was the first since HSBC revealed that AIA chief executive Mark Tucker will replace outgoing chairman Douglas Flint in October.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The dial has twitched in the right direction at HSBC, though the bank needs to sustain this performance for more than one quarter to convince shareholders it's on the up and up."

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