HSBC sets aside a further £500m to to deal with PPI claims
Monday 05 November 2012
The rising tide of financial penalties among Britain's banks continued to swell today as HSBC revealed additional charges for money-laundering breaches and mis-sold PPI.
The group said it had set aside an additional 800 million US dollars (£500 million) to cover fines from US authorities which accused the bank of inadvertently allowing rogue states and drug cartels to launder billions of pounds through its US arm.
The lender has now set aside 1.5 billion US dollars (£935 million) to cover the potential scandal but warned no agreement has been made and the cost could be "higher, possibly significantly higher".
Meanwhile, HSBC said it had taken an additional 353 million US dollars (£220 million) to cover compensation, mainly for mis-selling payment protection insurance (PPI), pushing its total PPI bill to more than two billion US dollars (£1.2 billion).
The additional penalties, as well as the impact of the value of its own debt, triggered a 51% slide in the bank's reported pre-tax profits for the three months to September 30 of 3.5 billion US dollars (£2.2 billion).
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