HSBC’s shares fell to their lowest level in 25 years on Monday as the bank faced allegations of money laundering and concerns about its ability to expand in Asia amid the fallout from the Covid-19 pandemic.
The London-based bank’s Hong Kong shares slid 5.33 per cent to 29.30 Hong Kong dollars at market close on Monday and plunged 6.23 per cent in London to £285.05 at 11.22am UK time. The stock has nearly halved since the start of the year.
On Sunday, the bank was among five global financial institutions named in a report by the International Consortium of Investigative Journalists that defied money laundering crackdowns by moving “staggering sums of illicit cash” in transactions that were flagged as suspicious. This happened even after US authorities fined the institution for “earlier failures to stem flows of dirty money”, the ICIJ report said.
"All of the information provided by the ICIJ is historical and predates the conclusion of our Deferred Prosecution Agreement (DPA) in 2017," HSBC said in a statement sent to The National. "Starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions ... HSBC is a much safer institution than it was in 2012."
The leaked documents, which are known as the FinCen Files, include more than 2,100 suspicious activity reports filed by banks and other financial firms with the US Department of Treasury’s Financial Crimes Enforcement Network.
The documents identified more than $2 trillion (Dh7.34tn) in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity, the report said. The top two banks are Deutsche Bank, which disclosed $1.3tn of suspicious money in the files, and JPMorgan, which disclosed $514 billion, the analysis found. Other lenders include Standard Chartered and Bank of New York Mellon, the report found, with HSBC disclosing $4.48bn in transactions.
The ICIJ report is another blow for HSBC, which is also a possible candidate for China’s “unreliable entity list” that looks to penalise firms, organisations or individuals that damage national security, according to the Communist Party’s Global Times newspaper.
HSBC declined to comment on the Global Times report.
Last month, HSBC reported a 65 per cent drop in pre-tax profits to $4.3bn for the first half of the year - a much steeper fall than analysts expected - with the bank's chief executive blaming a series of triggers.
“Our first half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility,” HSBC’s group chief executive Noel Quinn said in a statement on August 3.
“Despite this, our Asia franchise showed resilience, and our Global Markets business delivered strong growth compared with last year’s first half. Having paused parts of our transformation programme in response to the Covid-19 outbreak, we now intend to accelerate implementation of the plans we announced in February.”
While HSBC is based in London, more than half of its profits come from Hong Kong. Europe's biggest bank also set aside between $8bn to $13bn this year for bad loans as it expects more people and businesses to default on repayments amid the fallout from the Covid-19 outbreak.
The bank is also rolling out cost-cutting measures across its global banking operations, with Mr Quinn, who officially took over in March, saying the bank would expand further into Asia as its European operations lose money and accelerate an earlier restructuring plan which includes cutting 35,000 jobs.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
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His favourite book - 1984 by George Orwell
His favourite quote - 'If you think education is expensive, try ignorance' by Derek Bok, Former President of Harvard
Favourite place to travel to - Peloponnese, Southern Greece
Favourite movie - The Last Emperor
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Role Model - My father, Yiannis Davos
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Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
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Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
The Bio
Hometown: Bogota, Colombia
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Champions parade (UAE timings)
7pm Gates open
8pm Deansgate stage showing starts
9pm Parade starts at Manchester Cathedral
9.45pm Parade ends at Peter Street
10pm City players on stage
11pm event ends
