HSBC may face further $1bn in fines – and profits are plummeting

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Things aren’t getting any better for UK banking giant HSBC, which may now have to pay out an extra $1bn in fines following last year’s forex scandal and a string of negative revelations.

HSBC paid out $611m to authorities in the UK and the US in November, after six banks were accused of been manipulating FX markets. Investigations are still underway and the bank’s subsidiary, HSBC Holdings, set aside an extra $550m to cover potential additional fines.

However, it could now face paying another £500m in compensation to US customers who were mis-sold debt protection cover prior to May 2012.

In its annual report, released on Monday, the bank said that the additional remediation for this issue “may lie in a range from zero to an amount up to $500 million.”

Last week, ex-HSBC chairman stood down from a role at high-profile city lobbyists The City UK amid allegations that the bank helped tax dodgers funnel cash into Switzerland under his leadership.

This morning, the bank’s pre-tax profits were revealed to have tanked by 17%, causing share prices to fall by 5%.

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