Monday 21 September 2020 12:35 pm

HSBC shares hit lowest level since 1990s amid FinCEN scandal

HSBC’s rotten run has continued, with its UK share price falling to its lowest level since the 1990s amid allegations of money laundering.

Banks have already been squeezed hard by the pandemic: interest rates have been slashed and business loans look shaky. HSBC has also been embroiled in a geopolitical dispute between the US and China.

Read more: Leaked document trove reveals banking giants enabled money laundering

Now the banking giant is facing allegations – stemming from reports based on the leaked FinCEN files – that it allowed scammers to move money around the world despite warnings about the fraud.

HSBC’s UK share price tumbled 5.9 per cent to 285.9p after it slumped in Asia. It was around the lowest intraday level since 2009 and shares were set for their lowest closing price since the 1990s.

Shares in Standard Chartered – which is also Asia-focused – slipped 5.2 per cent to touch 340.8p, the lowest since 1998, after it was named in the same reports. Barclays and Deutsche Bank also tumbled for the same reason.

Buzzfeed and other news organisations reported that suspicious activity reports (SARs) showed that the banks moved large sums of illicit money over almost two decades. They did so despite red flags about the funds, the reports said.

Banks use SARs to report suspicious behaviour. But they are not in themselves proof of wrongdoing. The SARs were filed to FinCEN, the US Financial Crimes Enforcement Network.

FinCEN files batter HSBC and Standard Chartered

The FinCEN files reports said HSBC played a part in a £62m fraud. It is said to have moved the money through its US arm to accounts in Hong Kong in 2013 and 2014. HSBC has been contacted for comment. 

Stanchart said: “We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programmes.” 

Barclays said: “We believe that we have complied with all our legal and regulatory obligations including in relation to US sanctions.”

Deutsche Bank said the reports related to “historic issues”. It said: “The issues have already been investigated and led to regulatory resolutions.” The banks highlighted that SARs are not proof of wrongdoing.

The allegations are a fresh blow for HSBC, whose UK shares have shed around 50 per cent so far this year.

Read more: US accuses China of ‘bullying’ UK and hits out at HSBC

On top of coronavirus, it has been caught up in the raging geopolitical argument over Hong Kong. More than half its profits come from the Asian financial hub. Standard Chartered has faced similar pressures, sending its shares down around 52 per cent this year.

HSBC’s Asia-Pacific chief executive Peter Wong signed a petition in support of China’s imposition of a security law on Hong Kong, which human rights campaigners have harshly criticised. The move earned the bank a sharp rebuke from the US government.

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