HSBC sets aside $378m for watchdog investigation

HSBC Holdings has set aside some $378m (€302m) for a potential settlement with Britain’s financial watchdog for alleged manipulation of currency markets.

It comes as the bank reported a 12% decline in underlying profit in the third quarter.

Europe’s largest bank by market value provided $1.8bn in total in the quarter for fines, settlements, and compensation costs related to mis-selling loan insurance.

HSBC’s provision for the forex investigation was lower than the £500m set aside by Barclays and £400m provision by Royal Bank of Scotland.

The bank said yesterday that the British regulator had proposed a resolution of its investigation into alleged manipulation in the $5.3tn-a-day global forex markets.

HSBC is one of six banks in talks with the regulator to pay about £1.5bn in a group settlement, sources have said.

Banks in Europe and the US have recently set aside as much as $6.9bn for possible forex settlements.

The banking industry has already paid out billions of dollars to settle investigations across a range of activities, including mortgages and benchmark interest rates as authorities have tried to crack down on the excesses that led to the financial crisis.