by Staff Writers
London (AFP) July 30, 2012
Europe's biggest bank by assets, HSBC, posted on Monday a drop in half-year profits after taking a $2.0 billion-hit to cover costs from a US money-laundering scandal and mis-selling claims in Britain.
Net profit dropped 8.0 percent to $8.44 billion (6.88 billion euros) in the six months to June compared with the first half of 2011, the British lender said in a results statement.
The Asia-focused bank's pre-tax profit rose 11 percent to $12.7 billion, boosted by asset sales, particularly in the United States.
HSBC shares closed up 0.79 percent to 535.30 pence on London's benchmark FTSE 100 index, which ended with a gain of 1.18 percent at 5,693.63 points.
"Regulatory and compliance events in the first six months of the year overshadowed (the) financial performance. And that has added further to public concern and distrust of the banking industry," HSBC chairman Douglas Flint said in the earnings release.
HSBC took a provision of $700 million to cover fines for failing to apply anti-money laundering rules, apologised again for the scandal and warned that the overall cost of the affair could be "significantly higher."
The bank said it also set aside $1.35 billion, mainly to compensate clients who were mis-sold payment protection insurance in Britain.
The London-based lender said it continued to cooperate with authorities after US lawmakers last month accused it of failing to apply anti-laundering rules, benefiting Iran, terrorists and drug dealers.
"It is not possible at this time for HSBC to know the terms on which a resolution of the ongoing investigations could be achieved or the form or timing of any such resolution," the bank said.
"Based on the facts currently known, HSBC has recognised a provision of $700 million, which reflects HSBC's best estimate of the aggregate amount of fines and penalties that are likely to be imposed in connection with these matters.
"There is a high degree of uncertainty in making this estimate and it is possible that the amounts when finally determined could be higher, possibly significantly higher," the bank added.
HSBC was thrown into crisis last month when a US Senate report found that it had allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.
Lawmakers said money laundered through HSBC-linked accounts benefited Mexican drug lords and terrorist networks, and skirted US sanctions on Iran.
HSBC apologised again on Monday for the crisis which has already sparked the resignation of its head of compliance David Bagley.
"We apologise for our past mistakes in relation to anti-money laundering controls and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively," chief executive Stuart Gulliver said.
He added: "It is right that we be held accountable and I apologise for our past shortcomings.
"HSBC is now run and managed as a genuinely global firm, making it easier to set, monitor and enforce standards."
HSBC -- which unlike some of its British rivals survived the 2008 crisis without state bailouts -- was founded in Hong Kong and Shanghai in 1865 and is presently headquartered in London.
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Japan's Fujitsu says posts 16% fall in Q1 profit
Tokyo (AFP) July 27, 2012
Japanese high-tech giant Fujitsu on Friday said its first quarter net loss widened and cut its sales forecast for the fiscal year as it was hit by weaker demand and a strong yen. Fujitsu, which provides information technology services and makes consumer products including computers and mobile phones, booked a net loss of 23.7 billion yen ($304 million) in the three months through June, compa ... read more
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