MortgagesAug 3 2015

HSBC sees profits soar by 10% despite fines

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HSBC sees profits soar by 10% despite fines

HSBC said it was pressing on with making structural changes required by UK regulators, after reporting $1.5bn (£960m) worth of charges for fines and penalties during the first half of this year.

The banking giant reported pre-tax profits in the first six months of 2015, on a reported basis of $13.6bn (£8.7bn), 10 per cent greater than those delivered in the first half of 2014.

It did not provide an update on any decision to move its headquarters from Canary Wharf in east London to Hong Kong, but pointed out continued work on plans to base its ringfenced UK high street bank in Birmingham.

Douglas Flint, group chairman of HSBC, said that in the continuing low interest rate environment, it is essential to use technology and process improvement to generate further cost savings to offset the “growing expenditure needed to embed regulatory changes and provide greater assurance over financial crime risks”.

The interim results revealed provisions of £731m to cover settlements in connection with legal matters, with the bank subject to an FCA past business review into anti-money laundering systems and controls, with payments of £1.2bn already made to US authorities for not complying with anti-money laundering rules in the past.

The document also noted that HSBC is also co-operating with global authorities over allegations that its Swiss private banking arm helped clients evade tax.

Last month FTAdviser sister newspaper Financial Adviser reported HSBC was the second most visited bank by FCA officials in 2014.

In a response to a Freedom of Information request, the FCA said that Barclays had been visited some 186 times last year – a significantly higher number than for any other bank. The second highest number of visits was 85 for HSBC.

emma.hughes@ft.com