Five questions answered on HSBC’s money laundering provisions

Mexican drug money has passed through the bank.

HSBC has announced it has put more money aside to deal with US money laundering fines. We answer five questions on HSBC’s money laundering provisions.

How much more money has HSBC put aside?

A further 4800 million (£500 million) to cover potential money laundering fines imposed by the US. It had previously put aside $700 million.

Why does HSBC have to pay money laundering fines?

Because a report by the US Senate said that Mexican drug money had almost certainly passed through HSBC.

How much could these future fines cost HSBC?

HSBC is currently in discussion with US authorities in regards to a final settlement in fines. However, it did tell the BBC the "final amount of the financial penalties could be higher, possibly significantly higher [than the $1.5bn already set aside]".

The bank may also face corporate criminal charges, as well as civil penalties. In a statement released with its third quarter results the bank said:

"While the prosecution of corporate criminal charges in these types of cases has most often been deferred through an agreement with the relevant authorities, the US authorities have substantial discretion, and prior settlements can provide no assurance as to how the US authorities will proceed in these matters."

What about HSBC’s other finances?

Pre-tax profits for HSBC were announced by the bank as $3.5bn from July to September, down $3.7bn from a year earlier. However, underlying profits for the quarter totaled $5bn, more than double the figure recorded for the same quarter a year ago.

Is HSBC, like other banks in the UK, also embroiled in the PPI mis-selling scandal?

Yes. This is also costing the bank significant sums of money. It has set aside a further £223m in the UK to pay for PPI compensation claims, taking its total provisions to £1.3bn and the total for the UK banking industry as a whole to almost £13bn.

HSBC has put money aside to deal with laundering fines. Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Getty
Show Hide image

Will Jeremy Corbyn stand down if Labour loses the general election?

Defeat at the polls might not be the end of Corbyn’s leadership.

The latest polls suggest that Labour is headed for heavy defeat in the June general election. Usually a general election loss would be the trigger for a leader to quit: Michael Foot, Gordon Brown and Ed Miliband all stood down after their first defeat, although Neil Kinnock saw out two losses before resigning in 1992.

It’s possible, if unlikely, that Corbyn could become prime minister. If that prospect doesn’t materialise, however, the question is: will Corbyn follow the majority of his predecessors and resign, or will he hang on in office?

Will Corbyn stand down? The rules

There is no formal process for the parliamentary Labour party to oust its leader, as it discovered in the 2016 leadership challenge. Even after a majority of his MPs had voted no confidence in him, Corbyn stayed on, ultimately winning his second leadership contest after it was decided that the current leader should be automatically included on the ballot.

This year’s conference will vote on to reform the leadership selection process that would make it easier for a left-wing candidate to get on the ballot (nicknamed the “McDonnell amendment” by centrists): Corbyn could be waiting for this motion to pass before he resigns.

Will Corbyn stand down? The membership

Corbyn’s support in the membership is still strong. Without an equally compelling candidate to put before the party, Corbyn’s opponents in the PLP are unlikely to initiate another leadership battle they’re likely to lose.

That said, a general election loss could change that. Polling from March suggests that half of Labour members wanted Corbyn to stand down either immediately or before the general election.

Will Corbyn stand down? The rumours

Sources close to Corbyn have said that he might not stand down, even if he leads Labour to a crushing defeat this June. They mention Kinnock’s survival after the 1987 general election as a precedent (although at the 1987 election, Labour did gain seats).

Will Corbyn stand down? The verdict

Given his struggles to manage his own MPs and the example of other leaders, it would be remarkable if Corbyn did not stand down should Labour lose the general election. However, staying on after a vote of no-confidence in 2016 was also remarkable, and the mooted changes to the leadership election process give him a reason to hold on until September in order to secure a left-wing succession.

0800 7318496