HSBC profit hit by $800mn set aside for US fine

HSBC has taken a $1.15bn hit to cover a potential US fine for lax anti-money laundering controls and to pay compensation for mis-selling products in Britain, eating into its quarterly profit. While HSBC’s earnings were helped by a sharp drop in bad debts, it set aside $800mn to cover a potential fine from US regulators for breaches in anti-money laundering controls in Mexico, adding to $700mn put aside in July. HSBC, Europe’s biggest bank, said yesterday that no agreement had been reached with US authorities and the final resolution will likely involve criminal as well as civil charges. It said there was a high degree of uncertainty estimating the final cost and it was possible the amount will be significantly higher. The bank reported an underlying profit — after stripping out the impact of disposals and changes in the value of its own debt — in the July-September quarter of $5.0bn, up from a revised $2.2bn a year earlier. HSBC took another $353mn charge for mis-selling in Britain, mainly for payment protection insurance. Shares in HSBC were down 2.6% by 0832 GMT, the biggest faller in the FTSE 100 index and trailing a 1.4% fall in the European banking index.