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HSBC sets aside AUD$435m for claims it manipulated markets

HSBC has set aside $435 million to pay potential fines for alleged manipulation of currency markets, as it reported a 12 per cent fall in underlying earnings after costs rose.

Unlike its rivals Barclays and Royal Bank of Scotland, HSBC said it has not put an amount on any potential fine from US or other global regulators.

This raised questions over whether there will actually be a so-called omnibus deal between the six banks accused of fixing exchange rates and UK and US regulators before the end of the year.

Iain Mackay, finance director, said: "The only detailed settlement in which we are involved is the Financial Conduct Authority. The degree of co-ordination between regulators is limited at this point."

Last week, Barclays set aside $920 million and RBS $735 million over forex, saying that covered more than one regulator.

HSBC took another big hit on mis-selling PPI with $677 million in the last quarter, taking its total to $4.5 billion.

Chief executive Stuart Gulliver said: "In August and September we saw a step-up in claims coming from claims management companies who appear have been reinvigorating their drive to win new clients."

The bank's bottom line was also hit by another $245 million bill for matters relating to the Consumer Credit Act in the UK, a $633 million settlement in the US over mortgage-backed securities and a $311 million writedown on its stake in China's Industrial Bank.

That left pre-tax profits up by just 2 per cent at $5.2 billion in the third quarter, which was short of the $5.7 billion analysts had been looking for.

Gulliver said: "Our profits were up in all divisions but we also saw our costs rise. There were higher costs for compliance and there was cost inflation in the industry in Asia and Latin America.

"But bad debts were down, notably in Europe and North America.

"We are confident that we will go on delivering a progressive dividend."

HSBC also warned it had been summoned to appear before a French magistrate over French clients who had accounts with its Swiss private bank.

It said this could lead to criminal charges and "significant" fines or penalties.


All dollar figures are listed in Australian dollars unless labelled otherwise.

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