HSBC Profits Fall As Bank Reels From 'Painful' Tax Avoidance Furore

HSBC Profits Dive As 'Painful' Tax Furore Bites
The logotype of the British bank HSBC is pictured in Paris, France, February 9, 2015. Banking giant HSBC helped wealthy clients across the world evade billions of Euros worth of tax, Le Monde newspaper revealed on Monday. Photo by Thierry Orban/ABACAPRESS.COM
The logotype of the British bank HSBC is pictured in Paris, France, February 9, 2015. Banking giant HSBC helped wealthy clients across the world evade billions of Euros worth of tax, Le Monde newspaper revealed on Monday. Photo by Thierry Orban/ABACAPRESS.COM
Orban Thierry/ABACA

HSBC chief executive Stuart Gulliver has admitted the banking giant "disappointed" last year after its annual profits slumped 17%.

Gulliver has already admitted in a memo to staff on the "painful" tax avoidance allegations that the bank "sometimes failed to live up to the standards" expected by society.

The company still racked up a surplus of 18.7 billion US dollars (£12.1 billion) for 2014 but this was short of City expectations and led to a 3% slide in HSBC's share price in early trading.

The results were announced as Gulliver was dragged into the ongoing furore over the bank's tax activities following the disclosure that he has a bank account in Switzerland to hold bonus payments.

HSBC said he opened the account in 1998 when he was living and working in Hong Kong and full tax was paid in Hong Kong on the bonus payments. Gulliver has voluntarily declared his Swiss account to UK tax authorities for a number of years.

In relation to the Swiss tax scandal, HSBC chairman Douglas Flint said the bank needed to reinforce controls and demonstrate their effectiveness.

He added: "We deeply regret and apologise for the conduct and compliance failures highlighted, which were in contravention of our own policies as well as expectations of us."

The bank was also the subject of a £216 million fine from the Financial Conduct Authority relating to HSBC's failure to prevent the rigging of foreign exchange operations.

Gulliver admitted that 2014 had been a challenging year, with profits down due to a number of one-off factors including the settlement of regulatory fines.

He added: "Profits disappointed, although a tough fourth quarter masked some of the progress made over the preceding three quarters.

"Many of the challenging aspects of the fourth-quarter results were common to the industry as a whole."

Close

What's Hot