HSBC reported a profit in its global private banking segment of $527 million for the first half of the year, down from $552 million for the same period in 2011 but up from $392 million for six months ended 31 December. Meanwhile, HSBC estimated it will face fines totaling $700 million relating to the US anti-money laundering scandal, based on facts currently known.
In wealth management and retail banking, the UK and Hong Kong-listed lender more than doubled its pre-tax profit year-on-year to $6.41 billion in the six months to 30 June.
Across its divisions, HSBC made a profit before tax of $12.7 billion, 11 per cent higher than in the first half of 2011, including $4.3 billion in gains from disposals and $2.2 billion of adverse movements in the fair value of own debt. The bank's underlying profit dropped 3 per cent year-on-year to $10.6 billion.
HSBC attributed revenue growth of 4 per cent to increases in the faster-growing regions of Hong Kong and the rest of Asia-Pacific as well as markets in Latin America. The bank also said its Core Tier 1 ratio stood at 11.3 per cent at the end of June, an improvement from 10.8 per cent a year earlier.
In its interim financial and management statements published today, the bank addressed the many ongoing regulatory investigations it is involved in.
With regards to the anti-money laundering scandal in the US, HSBC estimated it will face fines totaling $700 million based on facts currently known. The lender recognizes, however, that "there is a high degree of uncertainty in making this estimate, and it is possible that the amounts when finally determined could be higher possibly significantly higher." Analysts quoted in the Financial Times have previously predicted around $1 billion in fines for HSBC for flawed anti-money laundering controls.
HSBC Mexico has already paid a fine imposed by the Mexican National Banking and Securities Commission amounting to 379 million Mexican pesos ($28 million) in connection with non-compliance with anti-money laundering systems and controls.