by: Harry Wilson
July 30, 2012
HSBC’s chief executive, Stuart Gulliver, has described the US money laundering scandal as “shameful and embarrassing” as the bank revealed the episode would cost it at least $700m (£444m).
In total, Britain’s largest bank said it had set aside $2bn in the first half of the year to cover the cost of money laundering as well as compensating UK customers mis-sold payment protection insurance and interest rate swaps.
Despite the provisions, HSBC reported a 11pc year-on-year increase in pre-tax profits for the first six months of 2012 to $12.7bn.
Mr Gulliver’s apology followed a damning report this month by the US Senate that slammed HSBC for letting clients shift funds from dangerous and secretive countries. The HSBC chief said the $700m provision was the bank’s “best estimate” of the cost of the scandal, but admitted the number could be “significantly larger”.