more-arw search

HSBC drops $2B in fines, 9 percent in profits

British bank HSBC reported losses and $2 billion in anticipated fines

The British bank HSBC is preparing to pay roughly $2 billion in fines and fees associated with an alleged money laundering scheme, as well as wrongly-sold payment protection insurance and derivatives.

According to BusinessWeek, the financial giant has set aside $700 million to cover the cost of fines stemming from a U.S. Senate investigation that found the agency had allegedly participated in money laundering for Mexican drug cartels and international terrorist organizations. A further $1.3 billion will go to British regulators to cover violations regarding the insurance and derivatives scandal.

The bank is facing four major crises at the moment, including the recent fiasco regarding the Libor rate, and they have taken a toll on the bank's financial reports. HSBC indicated that profits were down 9 percent in the first half of 2012 as a result of the multiple debacles, according to Trib Total Media.

In prepared statements accompanying the financial report, HSBC's leaders were contrite, with Chairman Douglas Flint apologizing for the bank's past mistakes and CEO Stuart Gulliver accepting responsibility for the penalties and fines.