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HSBC Apologizes for Compliance Failures

HSBC Holdings Plc, the British bank accused of helping drug lords in Mexico launder money, apologized to investors for compliance failings and set aside $2 billion more to cover the costs of fines and redress.

The lender made a $1.3 billion provision in the first half to compensate British clients wrongly sold payment-protection insurance and derivatives, London-based HSBC said in a statement yesterday as it posted an 8.3 percent drop in net income. It also made a $700 million provision for U.S. fines after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the U.S. financial system. That sum may increase, Chief Executive Officer Stuart Gulliver said.