HSBC - FAILURES

HSBC Apologizes For Compliance Failures      By Howard Mustoe and Gavin Finch - Jul 30, 2012 10:07 PM GMT+0530

HSBC Holdings Plc (HSBA), the British bank accused of helping drug lords in Mexico launder money, apologized to investors for compliance failings and set aside $2 billion more to cover the costs of fines and redress.

The lender made a $1.3 billion provision in the first half to compensate British clients wrongly sold payment-protection insurance and derivatives, London-based HSBC said in a statement today as it posted an 8.3 percent drop in net income. It also made a $700 million provision for U.S. fines after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the U.S. financial system. That sum may increase, Chief Executive Officer Stuart Gulliver said.

“Regulatory and compliance events in the first six months of the year overshadowed financial performance,” ChairmanDouglas Flint said in a statement today. “HSBC has made mistakes in the past, and for them I am very sorry.”http://www.bloomberg.com/news/2012-07-30/hsbc-profit-beats-estimates-on-income-from-asset-sales.html