$3.5bn restructuring exceeds company targets

UK’s HSBC announces 16.5% profit slump after scandals

GMT 11:49 2013 Monday ,04 March

Arab Today, arab today UK’s HSBC announces 16.5% profit slump after scandals

HSBC came under fire for money laundering allegations last year
London - Arabstoday

HSBC came under fire for money laundering allegations last year Asia-focused banking giant HSBC said on Monday that net profits sank by 16.5 percent to $14.03bn in 2012, a year in which it was rocked by a US money-laundering scandal, AFP has reported.
Profit after taxation had stood at $16.8bn in 2011, London-headquartered HSBC said in a results statement. Pre-tax profits meanwhile fell six percent to $20.65bn.
HSBC's performance was hit by a $1.9bn fine to settle US allegations of money laundering that were said to have helped Mexican drug cartels, terrorists and Iran.
The bank's results were also dented by a vast $5.2bn charge against the value of its own debt.
And it set aside an additional $1.4bn to cover customer redress programmes in Britain. That took its total annual bill to $4.3bn.
However, HSBC added that its capital position improved following a string of asset sales, including its stake in Chinese insurance giant Ping An.
And bad debts -- or consumer loans that have turned sour -- fell to $8.31bn from $12.13bn last time around.
HSBC also revealed that its cost-cutting programme had exceeded the group's targets.
Two years ago, in 2011, the bank announced a large restructuring programme, including plans to save up to $3.5bn by 2013 and to axe 30,000 jobs globally.
However, HSBC added Monday that it generated extra savings of $2.0bn, giving an annualised total of $3.6bn.
"HSBC made significant progress in 2012. First and foremost, we grew our business. We increased revenues, performed well in most faster-growing markets and enjoyed a record year in commercial banking," said chief executive Stuart Gulliver.
"We've made the business easier to manage and control by disposing of non-core businesses and surpassed our sustainable savings target,” he claimed.
"We also agreed a settlement with the US and UK authorities in respect of our past anti-money laundering and sanctions failings."
Gulliver will meanwhile receive a deferred annual bonus of just under £2.0m as part of a total package worth £7.4m. That compared with an overall figure of £8.0m in 2011.
HSBC is Europe's biggest bank by assets, was founded in Hong Kong, and sees Asia as its main market despite being headquartered in London.

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