Can it get any worse for HSBC? On this evidence probably not. Europe’s biggest bank reporting a 17 percent drop in annual profit as a tax evasion scandal at its private banking business in Switzerland continues to deepen.
How many times can HSBC say sorry?
“The two main culprits appear to be a cost base which seems to be burgeoning at the moment. It’s up over 6 percent. And a disappointing performance for the investment bank which of course will prompt questions of why are these people being paid?”
The results follow allegations the bank helped clients dodge tax by using hidden Swiss accounts.
The bank’s CEO has now been dragged into the scandal because he too has a Swiss account.
HSBC has confirmed it was set up in 1998 when Gulliver was living and working in Hong Kong.
It said it was used to hold bonus payments.
A spokeswoman adding full tax was paid in Hong Kong and Gulliver voluntarily declared the account to British tax authorities for a number of years.
As for being held in the name of a Panamanian company? Well that’s apparently for reasons of confidentiality, the spokeswoman also refusing to say how much the account contained.
“Gulliver hasn’t broken any rules by having a Swiss account. But from a PR point of view this revelation couldn’t have come at a worse time – the bank issuing one apology after the next in an attempt to limit the damage.”
The bank said it deeply regretted its past conduct at its private banking business.
adding the recent disclosures reminded it of how much there still is to do when it comes to restoring trust.
MIKE INGRAM of BGC PARTNERS says, “It isn’t really going to do much for investor confidence in HSBC or indeed public confidence in the bank or the banking system as a whole.”
Despite the apologies, shares fell more than 5%.
And HSBC will have to endure the spotlight for a while yet.
With group chairman Douglas Flint due to give testimony to parliament later this week.
(Ventuno)