According to the bank’s annual report, it may also face a $500m bill to compensate US customers who were sold debt protection products. In this connection, the bank paid restitution to some of them.
In November, at a time when it was one of six banks fined for alleged manipulation of FX markets, the bank paid $611m to authorities in the US and UK, which are still investigating the issue.
Recently, Swiss authorities have raided the offices of HSBC’s private bank in Geneva in a criminal inquiry into allegations of ‘aggravated money laundering’.
Prior to this, a bulk of secret bank account files were obtained through an international collaboration of news agencies.
The files revealed that the Swiss banking arm of HSBC helped wealthy customers avoid tax payments, in addition to hiding their assets.
Reuters quoted HSBC chief executive Stuart Gulliver as saying: "A number of us, myself included, think the practices of the private bank back in the past are a source of shame and reputational damage to HSBC. I think shame would be reasonable noun to use."
The bank, which reported a decline of 17% in annual pretax profit, cut its profitability target.
HSBC said allegations that its Swiss business had helped customers evade taxes, raid of its Geneva-based arm last week by Swiss officials and the current UK inquiry, had damaged the image of the company.
Image: 8 Canada Square, HSBC’s world headquarters in Canary Wharf, London. Photo: courtesy of Michael Pead/Wikipedia
