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HSBC Says ‘Worrying’ Countries Act Unilaterally on Rules
HSBC Holdings Plc (HSBA) Chairman Douglas Flint said it’s “worrying” that more countries are acting unilaterally on regulation as financial oversight undergoes its biggest change since the Great Depression of the 1930s.
“This puts at risk globally consistent regulation and also risks ‘balkanizing’ firms’ capital and liquidity resources,” Flint told shareholders at the bank’s annual meeting in London today. “This risks a retreat from globalization and greater financial exclusion -- neither consistent with the pursuit of growth.” He didn’t mention specific countries.
Flint’s comments come as Peter Sands, chief executive officer of Standard Chartered Plc (STAN), the other U.K. bank that gains most of its profit in Asia, said yesterday British banks face an “avalanche” of regulation with rules imposed “increasingly at the national level.”
Separately, HSBC agreed on Dec. 11 to settle U.S. charges that it helped Mexican and Colombian drug cartels launder millions of dollars in trafficking proceeds and set aside $1.9 billion for settlements, while increasing spending on compliance by $500 million in 2012.
“We were humbled and horrified to discover failings of such magnitude,” Flint, 57, told shareholders. “We have apologized unreservedly to all our stakeholders and have paid huge penalties both in monetary cost and reputational damage. And I take this opportunity to apologize again in person.”
HSBC on March 4 increased its 2012 dividend by 10 percent from 2011 to 45 cents a share. The payout ratio will remain at 40 percent to 60 percent of earnings for the next three-year period, the bank said today.
-- Editors: Jon Menon, Steve Bailey
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