HSBC caught up in probe on foreign exchange manipulation
The London-based bank said in its quarterly earnings statement on Monday that the British regulator, the Financial Conduct Authority, was conducting investigations alongside several other global agencies into a number of companies, including HSBC, "relating to trading on the foreign exchange market".
HSBC joins British banks Barclays and Royal Bank of Scotland in saying that they are part of the foreign exchange market investigations.
Deutsche Bank, UBS and US pair Citi and JPMorgan Chase have also said they are co-operating with regulators over the affair.
Barclays has reportedly suspended six traders while it investigates manipulation of foreign exchange markets and RBS has suspended two.
The banking sector has already been shaken by a rigging scandal related to the Libor, a benchmark interest rate for lending between banks that also determines numerous financial and interest rate contracts around the world.
That scandal has resulted in more than $US3.5 billion in settlements with financial institutions, as well as ongoing criminal prosecutions of several traders involved.
HSBC added that it was "co-operating with the investigations which are at an early stage".
It comes as the British bank announced a 28 per cent increase in net profit to $US3.2 billion in the three months to the end of September on major cost-cutting and lower bad debt charges.
"Revenue was stable in the third quarter, influenced by the mixed global macro-economic picture," HSBC chief executive Stuart Gulliver said.
"Our home markets of the UK and Hong Kong contributed more than half of the group's underlying profit before tax."
Mr Gulliver added: "Hong Kong continues to benefit from its close economic relationship with mainland China. We remain well positioned to capitalise on improving economic conditions in these markets."
HSBC said it would continue to focus on reducing its cost base after savings of $US400 million over the third quarter and total cuts since the start of 2011 of $4.5 billion. "This is well in excess of the target we set out to achieve by the end of 2013. We reinvested part of these savings in risk and compliance, increasing headcount by 1600 since December 2012," Gulliver said.
Headquartered in London, HSBC was founded in Hong Kong and sees Asia as its main market. It has slashed costs by billions of dollars and axed tens of thousands of jobs since 2011 under a massive restructuring of the group.
The bank added on Monday that its pre-tax profits rallied 30 per cent to $US4.53 billion in the third quarter compared with the same period last year. AFP
Frequently Asked Questions about this Article…
The foreign exchange manipulation probe is a worldwide investigation into suspected rigging of foreign exchange deals. HSBC, along with other major banks, is being investigated by the Financial Conduct Authority and other global agencies for their trading activities in the foreign exchange market.
The foreign exchange manipulation probe is a worldwide investigation into suspected rigging of foreign exchange deals. HSBC, along with other major banks, is being investigated by the Financial Conduct Authority and other global agencies for their trading activities in the foreign exchange market.
In addition to HSBC, other banks involved in the foreign exchange market investigations include Barclays, Royal Bank of Scotland, Deutsche Bank, UBS, Citi, and JPMorgan Chase.
In addition to HSBC, British banks Barclays and Royal Bank of Scotland, as well as Deutsche Bank, UBS, Citi, and JPMorgan Chase, are also cooperating with regulators in the foreign exchange market investigations.
HSBC has stated that it is cooperating with the investigations, which are still at an early stage. The bank is working with regulators to address the concerns raised.
HSBC has stated that it is cooperating with the investigations, which are still at an early stage. The bank is working alongside regulators to address the concerns raised in the probe.
Despite the ongoing probe, HSBC reported a 28% increase in net profit to $US3.2 billion for the three months ending in September, driven by major cost-cutting and lower bad debt charges.
Despite the ongoing investigation, HSBC reported a 28% increase in net profit to $US3.2 billion for the three months ending in September, driven by major cost-cutting measures and lower bad debt charges.
HSBC has increased its profits through significant cost-cutting measures, saving $US400 million in the third quarter alone, and a total of $4.5 billion since 2011. These efforts have helped improve their financial performance despite the investigation.
HSBC has focused on reducing its cost base, achieving savings of $US400 million in the third quarter and a total of $4.5 billion since 2011. The bank has also reinvested part of these savings in risk and compliance, increasing headcount by 1,600 since December 2012.
HSBC has reinvested part of its cost savings into risk and compliance, increasing its headcount by 1,600 since December 2012 to strengthen these areas.
As part of its massive restructuring efforts, HSBC has slashed costs by billions of dollars and cut tens of thousands of jobs since 2011 to streamline operations and improve efficiency.
HSBC's main markets are the UK and Hong Kong, which together contributed more than half of the group's underlying profit before tax. The bank benefits from Hong Kong's close economic relationship with mainland China.
HSBC's main markets are the UK and Hong Kong, which together contributed more than half of the group's underlying profit before tax. The bank benefits from Hong Kong's close economic relationship with mainland China.
HSBC plans to continue focusing on reducing its cost base and capitalizing on improving economic conditions in its key markets, particularly in Asia, to drive future growth.
The Libor rigging scandal resulted in more than $US3.5 billion in settlements with financial institutions and ongoing criminal prosecutions of several traders involved. This scandal has had a significant impact on the banking sector.
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