Britain's HSBC bank Monday reported a sharp drop in
third-quarter pre-tax profits to 3.5 billion dollars, as it conceded
that 1.5 billion dollars set aside for potential money-laundering
fines in the US may not be enough.
Figures released in London showed that pre-tax profit fell to 3.5
billion dollars between July and September, compared with nearly 7.2
billion dollars in the same quarter in 2011 - a drop of 51 per cent.
However, the bank said underlying profit for the third quarter -
excluding one-off provisions - almost doubled to 5 billion dollars
from 2.2 billion dollars in the same quarter of 2011.
Europe's largest bank said it had set aside 800 million dollars to
cover a potential fine from US regulators for alleged breaches in
anti-money laundering controls in Mexico, in addition to 700 million
dollars set aside earlier this year.
HSBC Group chief executive Stuart Gulliver said the bank was
"actively engaged" in discussions with the US authorities to try to
reach a solution. "But there is not yet an agreement."
"Indeed, the final amount of the financial penalties could be
higher, possibly significantly higher, than the amount accrued," said
Gulliver of the US investigation.
He said the bank had continued to make "significant" cost savings
in the third quarter, by "exiting non-strategic markets and selling
businesses and non-core investments."
"While subdued economic conditions persist in Europe and other
Western economies, we remain confident in our outlook for growth in
the emerging world and, particularly, in mainland China, where we
continue to expect a soft landing," said Gulliver.
Like all major British banks, HSBC has also been hit by a scandal
over the mis-selling of payment protection policies (PPI). HSBC said
Monday it had set aside a further 353 million dollars to compensate
claimants, taking its total bill for the scandal to 2 billion
dollars.
