HSBC profits hit by misdeeds
Chief executive Stuart Gulliver's tax affairs added to the gloom over the bank's disappointing results.
by: Andrew Van Sickle
HSBC announced pre-tax profits for 2014 to $18.7bn, a 17% drop. Much of the decline stemmed from penalties for various past misdeeds. The group has now abandoned its return on equity target of 12%-15% and replaced it with a new one of 10%. It has ditched its cost-income ratio target of 50% completely.
But chief executive Stuart Gulliver's own tax affairs overshadowed the results, when it emerged that he previously held money in HSBC's Swiss unit through a Panamanian company while being based in Hong Kong. He said this was to prevent staff finding out how much he was paid before he joined the board.
What the commentators said
Nor does it square with the professed drive towards greater transparency, noted Alistair Osborne in The Times. He rightly doesn't seem to have had much confidence in the Swiss bank's ability to keep secrets, while also noting that the systems in Hong Kong were full of holes.
Slack controls played a key part in the money-laundering scandal; could they cause further trouble now that Gulliver has said he can't be expected to monitor what all 225,000 employees are up to?
"No one expects him to know everything," said the FT. But if he and his team can't take responsibility for the group's actions at its current size, "the answer is simple: they should shrink it until they can".
How to make sure your business doesn't lose out in lockdown
Money is still available via government schemes to help small companies cope with the latest Covid restrictions. David Prosser outlines what you can g…
Leasehold reforms promise the end of a nightmare for many homeowners
Horror stories about unscrupulous landlords profiting from a legal relic of the feudal era are about to get a happy ending, says Simon Wilson.
Plenty more Brexit arguments to be settled yet
Many important negotiations remain to be sealed in our deal with the EU. "No deal is better than a bad deal" is the way to play it, says Matthew Lynn
Brexit deal: what's changed between Britain and the the EU
After years of wrangling and political scraps, Britain is now outside the EU and has secured a free-trade agreement with the bloc. So what's changed?