HSBC sets aside US$1.3b for currency-manipulation penalties

[LONDON] HSBC Holdings Plc set aside US$1.3 billion to cover the cost of settling claims it was involved in the manipulation of benchmark foreign-exchange rates.

"Investigations into HSBC by the Department of Justice, Federal Reserve Bank, and other authorities around the world continue," HSBC said in a statement Monday. "There are many factors that may affect the range of outcomes, and the resulting financial impact of these matters. Due to uncertainties and limitations of these estimates, the ultimate penalties could differ significantly."

HSBC paid about US$618 million to two regulators in the first round of settlements in the currency manipulation probe in November. The lender wasn't among the group of banks that six months later paid a further US$5.8 billion in penalties and pleaded guilty to reach a settlement with the US Justice Department.

So far, the penalties levied by global regulators in the foreign-exchange rigging probe have surpassed US$10 billion. The fines levied by the Justice Department have varied widely: UBS Group AG paid about US$203 million while Citicorp parent Citigroup Inc paid US$925 million.

BLOOMBERG