HSBC has admitted the bank’s failure to prevent money laundering in Mexico and the US was “shameful, embarrassing and very painful”, as it took a $700m charge to cover the cost of US regulatory fines.
The affair, compounded by $1.3bn of charges related to compensating customers who were mis-sold payment protection insurance and derivatives products in the UK, helped push underlying profits at Britain’s biggest bank down 3 per cent in the first six months of the year.
Stuart Gulliver, chief executive, reiterated an earlier apology. “The firm clearly lost its way,” he said. “But we have changed. It is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively.” The scandals, which undermined healthy performance in much of HSBC’s operations, particularly in its Asian heartland, come as Britain’s banks face political criticism and a regulatory crackdown. They are also feeding concern about London’s reputation as a financial centre.