HSBC Holdings Plc said it could face penalties of up to or exceeding $1.5 billion due to multiple global investigations of various of its subsidiaries, including the lender's Swiss private banking business unit, HSBC Private Bank (Suisse) SA.
Regulatory and law enforcement authorities in the U.S., Belgium, Argentina, India and Spain are probing the Swiss unit in connection with allegations of tax evasion, money laundering and unlawful cross-border banking solicitation.
In November 2017, HSBC reached a €300 million settlement with the French financial prosecutor over allegations that it assisted customers in evading taxes at HSBC Private Bank (Suisse), while the Hong Kong branch of the Swiss unit was fined HK$400 million after losing its appeal against a 2015 ruling for misconduct in selling products linked to the now-defunct Lehman Brothers Holdings Inc.
HSBC, which earlier reported a fourth-quarter 2017 loss attributable to ordinary shareholders of the parent company of $274 million, compared to a $4.44 billion loss a year earlier, has faced various litigation issues and said it recognized a provision of $604 million for these legal matters, as of Dec. 31, 2017.
The lender noted that the ultimate penalties could differ significantly from the expected amount, as a result of the uncertainties and limitations of the estimates.