HSBC Says Swiss Bank Tax Probe Could Cost More Than $1.5 BillionBy
Bank fined 300 million euros by French authorities last year
The firm had related provisions of $604 million at end of year
HSBC Holdings Plc said it could face penalties exceeding $1.5 billion stemming from multiple investigations into claims that its Swiss private bank unit helped clients evade paying taxes.
Authorities in the U.S., Belgium, Argentina, India, Spain and elsewhere are probing allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation at the Swiss private bank, HSBC disclosed in its annual report Tuesday. The bank paid the French government 300 million euros ($370 million) in November to settle allegations that it helped clients hide assets from local tax authorities.
HSBC has been dogged by a series of criminal investigations. Last month, the firm paid the Justice Department $100 million to settle allegations it had rigged clients’ currency transactions, part of a probe that led to the conviction of one former executive. The London-based bank had only just been released from a five-year deferred-prosecution agreement with the Justice Department for helping Mexican drug cartels launder money and breaching international sanctions by doing business with Iran.
Stuart Gulliver, whose last day as HSBC’s chief executive officer was today after seven years in charge, said the bank had moved on from the mistakes of the past.
"We have implemented global standards and financial controls to the highest levels," Gulliver said on a call with journalists Tuesday. "HSBC is in a stronger and better position today to protect itself from bad actors than we were in 2010."