HSBC profits affected by crimes of the past

4 November 2014

HSBC Bank trouble again, with HSBC stepping into the spotlight with their tale of mis-selling woe.

The bank's profits didn't quite gain the heights that were expected after they'd put aside $1.8 billion (£1.5 billion) to pay back compensation to customers as well as a possible fine for rigging the currency markets.

This does however indicate that regulators are generally stepping up to the mark and shaming bad banks and banking. If only they'd been this tough, say, six years ago.

HSBC reckon they'd spent $700 million more this year on compliance and risk than a year ago, and that level of expense looked set to stay, meaning it would miss one of its main cost targets.

HSBC said its forex investigation provision covered "detailed" talks with Britain's financial regulator about alleged manipulation in the $5.3 trillion-a-day forex market.

The talks were in relation to systems and controls in one part of its spot forex business in London, it said. Last month HSBC fired two traders in London, sources said.

Shall we see what excuses CEO Stuart Gulliver is bleating?: "The cost base of a global bank like ourselves is higher than it was before, because ... it includes a significantly higher compliance and regulatory cost than historically the banks had invested in,"

"It reflects the fact that standards, foreign policy, etc, all evolve in a world that is a lot less certain than it was 10, 15 years ago."

HSBC added 1,400 more compliance staff in the third quarter and now had 24,800 staff in risk and compliance, or one in 10 of its employees. That's heartwarming really, that the growth sector of banking-based employment is down to the bank themselves ripping its customers off.

We look forward to all our terms and conditions being updated in the coming weeks across the banking sector while they all fiddle with more margins and charges to claw some money back from our accounts, to atone for their mess-ups.

TOPICS:   Banking   Government

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