• Switzerland's news in English
Banking giant HSBC fights another scandal
Photo: AFP

Banking giant HSBC fights another scandal

Patrice Novotny/AFP · 9 Feb 2015, 18:50

Published: 09 Feb 2015 18:50 GMT+01:00

Facebook Twitter Google+ reddit

With a quarter of a million employees, a market capitalization of nearly $200 billion (176 billion euros) and one of the world's most prominent advertising campaigns, HSBC is hard to miss.
While its brand is splashed across billboards and airports around the world, its reputation has been tarnished in recent years by a string of high-profile controversies.
Allegations emerged on Monday that HSBC's Swiss private bank division helped rich clients avoid millions of dollars in tax after an employee, Hervé Falciani, stole secret files in 2007 and turned whistleblower.
In 2012, HSBC agreed to pay out $1.92 billion to US authorities for oversight failures which meant Mexican drug traffickers could launder money through its accounts and banned transactions took place from Iran.
Last year, it was charged with manipulating a key inter-bank lending rate by the European Commission.
Its foreign currency traders were also implicated in a scheme to make money by rigging markets uncovered by Britain's Financial Conduct Authority last year.
"There is a deliberate strategy by the bank to appeal to wealthy clients around the world, particularly in Asia, where HSBC has a major presence in Hong Kong and Singapore," said Maxime Mathon, a spokesman for Paris-based equity research house AlphaValue.

Vast global reach

The financial behemoth is headquartered in one of London's tallest buildings, a vast skyscraper in the ultra-modern Canary Wharf office district.
But that belies its history, rooted in the British empire of the 19th century.
The Hongkong and Shanghai Banking Corporation Limited was set up in Hong Kong in 1865 by Thomas Sutherland, a Scotsman who saw a niche catering to local businesses.
It grew quickly across Asia, North America and Europe, becoming one of the world's major banks by the end of the 20th century.
It now has some 50 million clients in 74 different countries around the world.
Like most globalized banks, HSBC has a whole range of different operations, from high street retail banking to trading on global money markets and private banking, which helps some of the world's richest people make the most out of their money.
Since the 2008 financial crisis, attitudes have changed to what is permissible for banks to do in pursuit of the highest returns for their clients, experts say.
"This HSBC story is a legacy of what did exist in private banking before the financial crisis and that the governments around the world don't want to exist any more," said Arun Melmane, an analyst at investment bank Canaccord Genuity.
"These are offences but they were quite overlooked at that time by a lot of jurisdictions due to Swiss secrecy."
HSBC's Swiss banking arm insists it has undergone a "radical transformation" since 2008 to stop its services being used to evade taxes or launder money.
"Swiss private banking nowadays is not about saving taxes but about managing people's money," Melmane said.

Story continues below…


For more news from Switzerland, join us on Facebook and Twitter.

Patrice Novotny/AFP (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Geneva terror suspects to receive compensation
File photo: Emran Kassim

The Swiss public prosecutor has dropped the case against them.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available