HSBC set aside £236m for FX settlement

London-based multinational HSBC Bank plc said on Monday it had set aside £236 million ($377 million) in preparation for fines over alleged manipulation of foreign exchange. The bank added it was only holding detailed settlement discussions with the British regulator.

The sizable provision was made for potential fines following a probe by the Financial Conduct Authority (FCA), which regulates institutions providing services to consumers.

HSBC said in a statement:

“Discussions are ongoing with the FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank plc’s systems and controls relating to one part of its spot FX trading business in London.”

Although nobody can be sure a resolution will be agreed, if a settlement is reached, the resolution will probably involve a considerable financial penalty, the bank added.

HSBC wrote “We continue to cooperate fully with regulatory and law enforcement authorities in the UK and other jurisdictions.”

Currency rigging

Six British banks face fines for alleged currency rigging.

Three of Britain’s ‘big four’ high street banks, Barclays, RBS (Royal Bank of Scotland) and HSBC, have so far set aside over £1.1 billion for potential fines by the UK regulator over foreign exchange manipulation.

HSBC probably faces hefty fines from US probes. However, it has not specific how much those penalties might be. It has already reached a $550 million settlement with the US Federal House Finance Agency.

Europe’s largest banking group is also setting aside about £370 million for the alleged mis-selling of payment protection insurance (PPI) in the UK.

HSBC will have to appear before French judges regarding allegations its Swiss private bank illegally helped French citizens dodge tax.

On Monday, the bank posted a PBT (profit before tax) decline of $595 million (-12%) for the third quarter to $4,409 million, compared to $5,004 million in Q3 2013.

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