HSBC to pay $765 m US fine over crisis-era conduct
LONDON: Britain’s Asia-focused bank HSBC on Monday revealed a $765-million US fine over the lender’s actions in the run-up to the subprime crisis, as it also logged rising first-half profits.
HSBC said it has agreed to pay the large US penalty over its conduct in residential mortgage-backed securities (RMBS), a type of investment derivative that bundled home loans into securities and was sold to investors before the 2008 financial meltdown.
“HSBC reached a settlement-in-principle to resolve the department of Justice’s civil claims relating to its investigation of HSBC’s legacy RMBS origination and securitisation activities from 2005 to 2007,” the lender announced in a results statement.
“Under the terms of the settlement, HSBC will pay the DoJ a civil money penalty of $765 million.” The London-headquartered giant is the latest global bank to reach a US settlement over conduct in the run-up to the notorious subprime crisis which sparked a worldwide recession.
However, the deal was agreed in July and therefore was not included in HSBC’s first half results, which cover the six months to June. HSBC posted advancing first-half profits and expressed optimism over the outlook — despite headwinds from rising costs, the China-US trade war and Brexit.
Pre-tax profit rose almost 5% to $10.7 billion in the six months to the end of June compared with a year earlier. Net profit or earnings after taxation gained 2.5% to $7.173 billion, boosted by highgrowth markets — particularly in Asia and the Middle East.
“We haven’t yet seen any impact on our business or through our customers,” chief executive John Flint told reporters when asked about the impact of the China-US trade spat. “It’s still too early to tell and in terms of estimating potential impact it’s difficult because we don’t quite know what the substance of the trade war will be.
HSBC said it has agreed to pay the large US penalty over its conduct in residential mortgage-backed securities (RMBS), a type of investment derivative that bundled home loans into securities and was sold to investors before the 2008 financial meltdown.
“HSBC reached a settlement-in-principle to resolve the department of Justice’s civil claims relating to its investigation of HSBC’s legacy RMBS origination and securitisation activities from 2005 to 2007,” the lender announced in a results statement.
“Under the terms of the settlement, HSBC will pay the DoJ a civil money penalty of $765 million.” The London-headquartered giant is the latest global bank to reach a US settlement over conduct in the run-up to the notorious subprime crisis which sparked a worldwide recession.
However, the deal was agreed in July and therefore was not included in HSBC’s first half results, which cover the six months to June. HSBC posted advancing first-half profits and expressed optimism over the outlook — despite headwinds from rising costs, the China-US trade war and Brexit.
Pre-tax profit rose almost 5% to $10.7 billion in the six months to the end of June compared with a year earlier. Net profit or earnings after taxation gained 2.5% to $7.173 billion, boosted by highgrowth markets — particularly in Asia and the Middle East.
“We haven’t yet seen any impact on our business or through our customers,” chief executive John Flint told reporters when asked about the impact of the China-US trade spat. “It’s still too early to tell and in terms of estimating potential impact it’s difficult because we don’t quite know what the substance of the trade war will be.