HSBC expects to be hit with $1.8bn charge over laundering

 
Tim Wallace
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HSBC is likely to face a bigger than expected fine from the US authorities, after lax controls allowed terrorists and drug dealers to launder money through its accounts.

The bank had already pencilled in a $1.5bn (£935m) hit, but it is now thought the fine could come in at $1.8bn.

But markets held steady, as they had been warned last month by bank chief executive Stuart Gulliver that the final fee could be “substantially higher” than the $1.5bn initially expected.

The settlement could be agreed before Christmas, though it depends on the complex negotiations between the various authorities and the bank.

HSBC may be able to avoid criminal sanctions by entering into a deferred prosecution deal, Reuters reported.

That would mean the bank admitting wrongdoing and promising to overhaul its compliance practices, and in return avoiding charges unless it breaks the rules again in the years ahead.

The potential settlement, which has been in the works for months, is emerging as a test case for just how big a signal US prosecutors want to send to try to halt illicit flows of money moving through US banks.

A HSBC spokesman said yesterday that the bank was cooperating with authorities in the ongoing investigations.

“The nature of discussions is confidential,” he added.