British bank HSBC reports big profit fall after scandal
The scandal-hit British banking giant, HSBC has reported a big drop in its 2014 profits.
HSBC says it encountered a 16% fall to nearly 14 billion dollars in its net profits last year, which it blames on the negative effect of fines and compensations.
The results follow allegations, which emerged earlier this month, that the British bank had helped people evade UK tax, using secret Swiss bank accounts.
HSBC’s shares fell more than 5%, hitting their lowest level for two-and-a-half years, after it reported its fall in profit, which was larger than analysts had expected.
The drop in profitability was driven by $2.4bn in fines and customer compensation costs, largely connected to fines in connection with traders’ attempted manipulation of foreign exchange rates and compensation for the mis-selling of payment protection insurance.
The bank has been streamlining its business in an attempt to boost earnings, and chief executive Stuart Gulliver said it had now closed or sold 77 businesses and lost 50,000 jobs since he took the helm in 2011, the state-run BBC reported.
On Monday, HSBC reiterated its recent apology for the conduct of its Swiss private bank, saying the historical practices and behavior were “unacceptable”.
It said restoration of trust in the industry “remains a significant challenge as further misdeeds are uncovered but it is a challenge we must meet successfully”.