Europe's biggest lender has reported before-tax profit of $18.87 million, marking a lift of just 1 per cent on the bank's 2014 performance but none-the-less a return to growth after a 17 per cent drop in profit last year. However, HSBC's legal bills have stacked up to a staggering $1.65bn over the last 12 months, lifting almost $500m year-on-year from $1.19bn in 2014.
Legal woes pile high
The bulk of HSBC's hefty legal spend has been channeled towards settling litigation and compensating customers in the United Kingdom for mis-sold insurance products. In October, HSBC forked out $285 million to settle exchange rate manipulation allegations brought by US authorities. The bank is also facing ongoing litigation in London courts relating to foreign exchange rate investigations and claims related to Libor rigging.
'Princelings' investigation
According to HSBC's annual report, the bank is also one of 'multiple financial institutions' being investigated by the US Securities and Exchange Commission for their hiring practices in the Asia-Pacific region. The SEC probe is looking into hiring practices around what have been nicknamed 'princeling' candidates—those referred by or related to government officials or top executives of state-owned enterprises in the region. HSBC has not speculated on the likely duration of the probe or potential outcomes, though suggesting that its impact 'could be significant.' Sources: The Lawyer; HSBC; Reuters
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