HSBC profits hammered by pandemic, soaring US-China tensions

HONG KONG - HSBC on Monday said profits for the first half of 2020 plunged by 69 percent on year as the banking giant was hammered by the coronavirus pandemic and spiralling China-US tensions.

The lender reported post-tax profits of $3.1 billion while pre-tax profit was $4.3 billion, a 64 percent drop on the same period last year. Reported revenue was down nine percent at $26.7 billion.

Chief executive Noel Quinn described the first six months of the year as "some of the most challenging in living memory".

"Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility," he said in a statement to the Hong Kong stock exchange, 

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid year. 

Before the coronavirus crisis it was beset by disappointing profit growth, ground down by US-China trade war uncertainties and Britain's departure from the European Union.

The Asia-focused lender embarked on a huge cost-cutting initiative at the start of the year, including plans to slash some 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.

But HSBC has a further headache -- geopolitical tensions via its status as a major business conduit between China and the West.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.

Caught in crossfire

As a result it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.

The bank has tried to stay in Beijing's good graces. 

It vocally backed a draconian national security law that Beijing imposed on Hong Kong in June to end a year of unrest and pro-democracy protests.

The move sparked criticism in Washington and London but analysts saw it as an attempt to protect its access to China, which has a track record of punishing businesses that do not toe Beijing's line.

But that has not shielded it from Beijing's wrath. 

Last month the bank was a subject of multiple reports in China's state-run media claiming that it had helped to provide the evidence that led to the arrest in Canada of Huawei executive Meng Wanzhou on a US arrest warrant.

HSBC released a statement on its Chinese Weibo accounts saying it had not "framed" telecom giant Huawei or "fabricated evidence" that led to the arrest of Meng.

China's internet censors blocked access to HSBC's statement within hours of publication, without offering an explanation.

Quinn referenced the bank's growing political vulnerability in Monday's statement.

"Current tensions between China and the US inevitably create challenging situations for an organization with HSBC's footprint," he said.

"However, the need for a bank capable of bridging the economies of East and West is acute, and we are well placed to fulfil this role," he added.

The bank's Asia operations continued to show "good resilience", Quinn said, with profit before tax of $7.4 billion.

Earlier this year Quinn put some of the job cuts on hold as the pandemic struck.

But in Monday's statement he vowed to press ahead with the cost-cutting.

"As we seek to accelerate our transformation in the second half of the year, I am mindful of the impact it will have for some of our people, particularly those leaving us," he said. 

Agence France-Presse

Asian banks brace for bad loans spike as virus batters region's economies

Asian banks are bracing for a rough ride in the coming 6 months as the coronavirus epidemic disrupts businesses across the region, likely prompting a spike in bad loans and ultimately dealing a blow to their bottom lines.

Lenders from DBS, Singapore's biggest bank, to HSBC, the largest of 3 currency-issuing banks in Hong Kong, have warned in the past 2 weeks that they will have to set aside additional provisions for loan losses in the first quarter " a risk they say is short term and manageable.

China's biggest banks are not scheduled to update their guidance for 2020 until next month, but credit ratings agency S&P Global Ratings has forecast that the peak questionable loan ratio for China's 285 trillion yuan ($40.5 trillion) banking sector "may almost double" in a worst-case scenario.

"We have also seen it can take years to restore standards in (non-performing loan) recognition, and in the quality of the financial statements, once such standards are loosened," S&P analyst Ryan Tsang said in a research note. "We see a risk that companies may exploit relaxed standards to drag out repayments for years."

HSBC, which counts Hong Kong as its largest market and has made a big bet on growth in the Greater Bay Area, said last week it expects about $600 million of provisions for additional loan losses if the coronavirus outbreak drags on into the second half of the year " its worst-case scenario.

"There will be revenue impact, which will become progressively more acute, if the coronavirus was to continue beyond the next month to six weeks," Ewan Stevenson, the HSBC chief financial officer, said on a conference call on February 18. "We think that the Q1 impact, as we sit here today, is probably rangebound in the order of about $200 million to $500 million relative to our previous planning assumptions."

DBS said it expected credit costs " the amount set aside for bad loans " to increase by 4 to 5 basis points for the year.

Credit ratings agency Moody's Investor Service said on Tuesday that non-performing loan (NPL) ratios at DBS and its Singapore rivals Oversea-Chinese Banking Corporation and United Overseas Bank were likely to rise to 1.6 percent to 1.7 percent this year as a result of economic disruptions from the outbreak, from 1.5 percent at the end of 2019.

Economists have warned China's economic growth, which was already slowing, could dip to as little as 4.4 per ent in 2020 and weigh on the regional economy. China's gross domestic product (GDP) grew at 6.1 percent last year, its slowest pace in 29 years.

Standard Chartered said the coronavirus could potentially affect 42 percent of China's GDP because of its effects on the electronics, automobile, construction, retail, transport, accommodation, catering, real estate and recreation sectors.

"There is ample evidence that the outbreak has taken a heavy toll on these sectors," Wei Li, the bank's senior China economist, said in a research note Friday.

The People's Bank of China and other financial regulators have urged banks to lend more to support struggling businesses, with the central bank saying a "small increase" in NPLs would be "tolerated" to get companies back to work as soon as possible. Banks in Hong Kong and Singapore also have announced measures to support struggling small businesses and retail customers, including interest-only payments on mortgages and commercial loans.

Paul McSheaffrey, a partner at accountancy firm KPMG said banks in Hong Kong were likely to see higher impairment provisions as support measures are rolled out.

"Those loans may not actually be bad. The principal could be repaid, but the fact that it's delayed and that there's a separate agreement with the borrower will cause a perception of higher risk and that will be a higher provision," McSheaffrey said. "We will undoubtedly see some losses and higher losses coming through, particularly in Hong Kong and China."

To be sure, banks' balance sheets in the region are relatively robust. NPL ratios at lenders in China and other economies hit hard by the outbreak, including Hong Kong, Japan, South Korea and Singapore, are some of the healthiest in the region.

China's NPL ratio was 1.8 percent at the end of the first quarter 2019, the latest set of data available, while Hong Kong's NPL ratio was 0.6 percent and Singapore's was 1.3 percent, according to the International Monetary Fund.

By comparison, the NPL ratio in India, the third-largest economy in the region behind China and Japan, was 8.9 percent at the end of last year's first quarter and 0.9 percent in the United States.

The bulk of the coronavirus cases are in mainland China, followed by South Korea and Japan. Singapore has the biggest number of confirmed cases in Southeast Asia with 90 afflictions at last count, more than the 81 confirmed cases and two fatalities in Hong Kong.

A JPMorgan analyst said investors should remain constructive on the financial sector as bank stock valuations remain attractive, balance sheets are robust and the industry is likely to benefit from improving economic conditions in the second half of the year.

"Our base case view is the virus outbreak will not derail the economic activity for more than a few months," JPMorgan analyst Mslav Matejka, said in a research note on Monday.

For the moment, many banks are forecasting the coronavirus outbreak to be a temporary drag on the region's economy, with several citing their experience during the severe acute respiratory syndrome (SARS) outbreak in 2003 as a potential template.

DBS said the outbreak was likely to affect it for one quarter as it did during Sars. "Even if it was double that, it would imply an incremental credit cost of $250 million to $300 million. The general allowances that we have built up over the past year have been robust," Piyush Gupta, the DBS chief executive said, on a conference call on February 13.

Still, the epidemic comes at a challenging time for Asia's banks. Margins are already being pressured by easing monetary policy by central banks in the region and a slowdown in global growth following the US-China trade. Several markets, including Hong Kong and Singapore, also are expected to see the debut of new virtual banks that could further cut into profits this year.

"That downward pressure will continue to bite," Andrew Gilder, EY's Asia-Pacific banking and capital markets leader, said. "I don't see markets in this region going to negative rates, so there's only so low (policymakers) can go. But, the market demands a lower rate on the cost side. If the deposit rates are floored at zero in the region, the borrowing rate for the bank's customers isn't and can continue to go down a bit. That squeezes the margin."


Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

HSBC says CEO Flint steps down, pre-tax profit up 15.8 pct

HONG KONG - HSBC on Monday said its Group Chief Executive John Flint had stepped down as the bank braces for geopolitical uncertainties.

The announcement came as the banking giant reported pre-tax profit was up 15.8 percent at $12.4 billion for the first half of the year.

Adjusted pre-tax profit also rose 6.8 percent year-on-year to $12.5 billion, the bank said.

Flint's departure was revealed as HSBC said it was facing an "increasingly complex and challenging global environment".

"Although not carrying out his day-to-day duties after today, he (Flint) remains available to assist HSBC with the transition," the bank said in a statement.

Noel Quinn, head of the commercial banking division, will be interim CEO, the statement added.

source: news.abs-cbn.com

Britain's HSBC to help modern slaves 'rebuild lives' with bank access

LONDON - British retail bank HSBC UK launched a scheme on Monday to help victims of modern slavery and human trafficking in Britain "rebuild their lives" by giving them access to bank accounts.

The bank, part of the London-listed global finance group, said it had been working with law enforcement and charities to identify people who have escaped slavery and trafficking to whom it can offer its "Survivor Bank" service.

Banks usually require proof of address and identity documents, like passports, to open accounts, which can exclude victims of slavery and trafficking who may have had these documents confiscated or live in safe houses.

"Financial independence is a vital part of this rebuilding process," Victoria Atkins, Britain's minister for crime, safeguarding and vulnerability, said in a statement.

The service is believed to be the first of its kind in Britain and could potentially be expanded to other countries, a spokeswoman for HSBC told the Thomson Reuters Foundation.

Trained staff in 18 of HSBC's UK branches in areas identified as having "high potential need", including London, Birmingham and Manchester, will help the victims set up current accounts.

Britain is home to at least 136,000 modern slaves, according to the Global Slavery Index by human rights group the Walk Free Foundation - a figure 10 times higher than a government estimate from 2013.

Survivor Bank will be offered to people who have been identified through the government's National Referral Mechanism (NRM), a scheme that identifies victims and gives them support.

About 7,000 suspected slavery victims were identified in Britain last year, up a third on 2017, with labor exploitation the most common form of slavery, ranging from men working in car washes to children forced to carry drugs.

"It is a tragedy that people who have escaped their traffickers can face such a struggle to rebuild their lives," Stuart Haire, head of HSBC UK's retail bank, said in a statement.

The scheme was piloted in HSBC branches in Glasgow in Scotland, and Nottingham in central England, between June 2018 and March 2019, helping 24 people set up basic bank accounts, with debit cards and online banking.

Banks have been called upon in recent years to step up the fight against human trafficking and slavery by reporting suspicious transactions and other financial activity that ring alarm bells.

Financial institutions hold data on traffickers and their victims that could play a vital role in combating trafficking, found a 2017 report by the Royal United Services Institute (RUSI). 

source: news.abs-cbn.com

HSBC in $100 million forex fraud settlement

NEW YORK - British financial giant HSBC has agreed to pay more than $100 million to US authorities after admitting to defrauding clients during multi-billion-dollar foreign exchange transactions, the Justice Department said Thursday.

The settlement follows an indictment handed down Wednesday against a former Barclays trader similarly accused of defrauding the former California computing giant Hewlett-Packard by manipulating foreign exchange markets.

Under the terms of the agreement, which is under review by a federal judge in Brooklyn, HSBC will pay a $63.1 million fine and an additional $38.4 million in restitution and disgorgement -- or the return of ill-gotten gains, the Justice Department said.

"HSBC's admissions in connection with this resolution confirm that the company misused confidential client information for its own profit on more than one occasion," John Cronan, the acting head of the department's criminal division, said in a statement.

"This sort of misconduct not only harmed their clients, costing the victims money, but it also ran a serious risk of undermining the public's confidence in our financial markets."

Prosecutors say that in 2010 and 2011, traders on HSBC's foreign exchange desk used confidential client information to conduct trades in British currency that deliberately drove the price of sterling in a direction benefitting the bank and harming the clients.

US officials only identified one of the two clients: the British oil and gas explorer Cairn Energy.

HSBC has agreed to continue cooperating with investigators and foreign authorities in any related investigations, including cases brought against individuals and to enhance its internal safeguards against misconduct.

The Justice Department said HSBC received no leniency for voluntarily disclosing the matter, adding that initially the bank's cooperation with investigators was also "deficient in certain respects."

But that HSBC soon "changed course" after prodding from the government, earning "substantial cooperation credit."

The bank faces charges of wire fraud but these are likely to be dropped once HSBC fulfills its obligations under the settlement.

Thursday's settlement comes barely a month after the lapse of a landmark 5-year, $1.9-billion deal between US authorities and HSBC in which the British lender avoided prosecution after admitting in 2012 to widespread money-laundering and sanctions violations.

In October, HSBC's former head of foreign exchange cash trading, Mark Johnson, was convicted of 8 counts of conspiracy and one count of wire fraud after a four-week trial. He is due to be sentenced next month.

HSBC was one of 6 major US and European banks that were fined a total $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

source: news.abs-cbn.com

Europe, tech keeps stocks in check; US dollar softens

NEW YORK - Retreating US technology shares and soft European markets capped world equity gains on Monday, while the US dollar fell to its lowest level in over a year against a basket of major currencies.

European shares initially gained on a boost from HSBC, as Europe's biggest bank unveiled a 5-percent rise in half-year profits and a third share buyback in a year. But they later retreated amid weakness in tobacco stocks and some broker downgrades.

HSBC shares ended up 1.8 percent after earlier gaining nearly 4 percent in London trading.


The pan-European FTSEurofirst 300 index lost 0.11 percent, while MSCI's gauge of stocks across the globe gained 0.16 percent. MSCI's index was poised for its best month in a year while the FTSEurofirst lost ground for a second straight month.

On Wall Street, banks were also a bright spot, with the S&P financial index up 0.63 percent as the best performing of 11 major sectors.

Weakness in technology stocks such as Facebook, down 1.9 percent and Apple, off 0.4 percent, curbed gains on the broad S&P index and pushed the Nasdaq into negative territory. Apple is scheduled to report earnings after the market close on Tuesday.

Economic data on the US housing market showed contracts to buy previously owned US homes rebounded in June after 3 straight monthly declines, while other data showed Midwest factory activity slowed after hitting a 3-month high in June.

"Maybe part of the reason why we're flattish today, at least for the S&P, is that people are trying to figure out where the overall economy is going and the signs have been mixed," said Ed Keon, managing director and portfolio manager at QMA, a multi-asset manager in Newark, New Jersey.

"If you look at broader picture, a lot of the data has been a little on the disappointing side."

The Dow Jones Industrial Average rose 60.88 points, or 0.28 percent, to 21,891.19, the S&P 500 lost 1.74 points, or 0.07 percent, to 2,470.36 and the Nasdaq Composite dropped 26.55 points, or 0.42 percent, to 6,348.12.

Both the Dow and S&P 500 rose for the fourth straight month.

TOBACCO COMPANIES DROP

Shares of world tobacco companies continued to lag, after the US Food and Drug Administration proposed on Friday to cut nicotine in cigarettes to non-addictive levels.

British American Tobacco fell 5 percent, after dropping 6.8 percent on Friday, and Imperial Brands fell 5.9 percent. In the US, Altria Group, off 2.4 and Philip Morris, down 0.9 were among the top drags on the S&P 500.

Mining companies in London advanced 0.34 percent, as copper hit a fresh 2-year high after Chinese data showed that while manufacturing growth cooled slightly this month, a government infrastructure push kept construction moving.

Copper rose 0.75 percent to $6,372.50 a ton, having risen as high as $6,430.

The US dollar hit a 2-1/2-year low against the euro on Monday on month-end portfolio adjustments and expectations for a more hawkish European Central Bank, and touched a more than 6-week low against the yen on concerns over low US inflation.

The dollar index fell 0.45 percent, with the euro up 0.74 percent to $1.1837. The dollar index hit a low of 92.786, its lowest level since May 2016, and has fallen for 5 straight months.

Benchmark 10-year notes Benchmark 10-year notes last fell 1/32 in price to yield 2.2888 percent, from 2.287 percent late on Friday ahead of a heavy week of data, which will culminate in Friday’s employment report for July.

Oil prices climbed as news of a producers' meeting next week added to bullish sentiment driven by the threat of U.S. sanctions against OPEC-member Venezuela.

US crude settled up 0.9 percent at $51.17 per barrel and Brent settled up 0.3 percent at $52.65 on the day.

source: news.abs-cbn.com

A boost for the remortgage market

So June the 23rd delivered a momentous decision that few were expecting. The shock has not been the result so much as to how people have behaved subsequently: the Prime Minister has resigned, the labour shadow cabinet has thrown their toys out of the pram regarding the leadership of their party, while Nicola Sturgeon opportunistically wants to fragment the kingdom still further with, ironically, a vote for independence that will make the Scots less independent.

Ultimately however, democracy has taken its course and a vote has been taken, now it is time for everyone to pull together, regardless of political persuasion, or which way you voted.  It is time to look to the future of our great country and make it a success. This will only happen by everyone working together to make it so.  The more there is division the more that people who want to see the UK fail will start to gain a foothold.

So to the mortgage market. Mortgage rates were dropping for many weeks before the referendum and we had already seen the launch of the lowest ever fixed rate. Lenders have continued to lower interest rates, with a sub 1% rate being launched by HSBC before the referendum, and it looks like rates will not be going up any time soon.

In this respect it seems like what the politicians are forecasting and what is actually happening on the ground is pulling in separate directions and predictions are often little indication of what will actually happen.

In fact it is almost impossible to judge, partly because even the people meant to be making many of the pivotal decisions still do not know what decisions to make themselves. At the time of writing Mark Carney is unsure whether he will need to lower rates to boost spending or whether he will need to raise them as we may have an inflationary situation because the cost of oil will rise, as will other things dependent on the sterling/dollar exchange rate.

While swap rates have been falling for some time, giving banks access to cheap three and six month money, there is a chance that funds further down the line may be more expensive if UK banks find it harder to access money from the money markets. This would raise the cost of mortgages regardless of what the Bank of England does. However, there is certainly no shortage of money to be lent at the moment which is contributing to the incredibly low rates.

Either way this is arguably good news for the mortgage market right now as we may well see the number of remortgages rise. On the one hand we have the lowest mortgage rates we have ever had, on the other there is a prospect that they may rise in three to six months. Both of which mean if ever there has been a time for mortgage brokers to get in touch with their clients, now is it.

source: mortgageintroducer.com

Vista Land markets bonds to refinance up to $500-M debt

MANILA - Philippine property developer Vista Land & Lifescapes Inc. is marketing a new set of dollar notes to pay back as much as $500 million bonds maturing this year through 2019, a company official said on Thursday.

Vista Land offered to redeem $100 million 6.75 percent notes due 2018 and $350 million 7.45 percent notes due 2019, to be funded by the issuance of new notes, the firm's investor relations chief Brian Edang told Reuters.

The company, one of the largest homebuilders in the Philippines, also plans to raise around $50 million to pay bonds maturing in September, he added.

Thomson Reuters publication IFR reported that the seven-year Reg S bond offering is being marketed to yield around 7.75 percent.

The amount and terms of the new bonds will be finalized later on Thursday, Edang said.

Vista Land hired DBS and HSBC as global coordinators and bookrunners of the bond offer.

BDO Capital and China Banking Corp. are the joint domestic lead managers for the offering.

source: www.abs-cbnnews.com

HSBC chief kept millions in Swiss account: report

LONDON, United Kingdom - HSBC chief executive Stuart Gulliver, who vowed to reform the scandal-hit bank, kept millions of dollars in a Swiss account, the Guardian newspaper reported on Sunday.

It is the latest in a stream of so-called "Swissleaks" allegations that have hit the reputation of the British banking giant and caused a political storm ahead of a general election in May.

The report claims the chief executive was a client of the Swiss private banking arm accused of helping wealthy clients evade tax.

Gulliver held about $7.6 million (6.7 million euros) in 2007 in a Swiss account in the name of Worcester Equities Inc, a Panama-registered company, according to the report.

Gulliver, who is based in Britain but is domiciled in Hong Kong for legal and tax purposes, was listed as the beneficial owner of the account, the report said.

It was published on the evening before Gulliver is due to present HSBC's annual report, expected to be overshadowed by a scandal that has prompted investigations of the bank by Britain's financial watchdog and Swiss authorities.

HSBC did not immediately respond to a request for comment by AFP.

However, a representative for Gulliver told the Guardian that the chief executive had used a Swiss account to hold his bonus payments prior to 2003, when he moved from Hong Kong to London.

Gulliver's lawyers said that Hong Kong tax had been paid on this income and that his Swiss accounts had been declared to British tax authorities.

British newspapers published a letter from Gulliver apologising for the Swiss division's behaviour in full-page advertisements last week.

Gulliver insisted the Swiss arm had been "completely overhauled" since 2007, when former employee Herve Falciani stole a huge cache of data and passed it to French authorities.

British tax authority HM Revenue and Customs (HMRC) officials, accused of failing to act adequately on evidence of tax evasion in the files, are to be grilled by members of parliament on Wednesday.

source: www.abs-cbnnews.com

Swiss raid HSBC in money laundering probe

GENEVA - Swiss authorities on Wednesday raided British banking giant HSBC's Swiss unit as part of a money laundering probe into the bank that has been accused of helping clients to dodge millions of dollars in taxes.

The investigation comes just days after HSBC Switzerland became the centre of a global scandal following the publication of secret documents claiming it assisted many of its wealthy clients in thwarting the taxman.

"A search is currently under way in the bank's offices," Geneva's top prosecutors said in a statement.

The search and money laundering investigation was launched "following the recent revelations related to HSBC Private Bank (Switzerland)," they added.

The cache of files, made public in the so-called SwissLeaks case, claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing $119 billion (104 billion euros).

The files provided details on over 100,000 HSBC clients, including people targeted by US sanctions, suspected arms dealers and drug traffickers.

A wide range of celebrities, politicians and business leaders were also named, although their inclusion does not necessarily imply wrongdoing.

The documents, originally stolen by former HSBC IT worker Herve Falciani in 2007, alleged that billions of dollars transited through the bank as customers from around the world tried to dodge taxes in their home countries or laundered dodgy proceeds through offshore shell corporations.

Falciani told Swiss television RTS late Wednesday that he was ready to help the Swiss authorities in their investigation against HSBC in return for "safe passage."

The Swiss have charged him with data theft.

He said he would cooperate with the Swiss in the same way he has with the Spanish authorities by sharing information through the "cloud."

Risks five years prison

Following the raid, HSBC Switzerland said: "We have cooperated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to cooperate."

According to Swiss law, a bank can be held responsible for "aggravated money laundering" if it does not take all the necessary measures to ensure such infractions do not take place within its institution.

The prosecutor general Olivier Jornot in the Geneva canton and another top prosecutor, Yves Bertossa, were heading the HSBC investigations.

They said the probe initially only targeted the bank itself, but warned that "depending on the evolution, the investigation might be broadened to include physical persons suspected of committing or participating in acts of money laundering".

Anyone found guilty of such crimes could face up to five years behind bars as well as large fines.

Following the SwissLeaks revelations more than a week ago, HSBC's Swiss banking arm insisted it has undergone a "radical transformation" since the period referred to in the files.

HSBC now has "strong compliance controls in place", Franco Morra, the head of HSBC's Swiss unit, told AFP in an email, adding that the revelations are "a reminder that the old business model of Swiss private banking is no longer acceptable".

The SwissLeaks documents were obtained by French newspaper Le Monde and shared via the International Consortium of Investigative Journalists with more than 45 media organisations worldwide.

As soon as the documents were made public on February 9, calls arose for a Swiss probe against HSBC Switzerland, which is already facing prosecution in the United States, France, Argentina, Spain and Belgium.

Switzerland had so far only launched an investigation against Falciani.

Falciani himself said last week that the media reports on the documents' contents were based on just a fraction of the files he handed over to French authorities.

"This is only the tip of the iceberg," the 43-year-old Franco-Italian told France's Le Parisien newspaper.

Falciani remains wanted on data theft charges, but France and Spain have offered him protection by refusing to extradite him to Switzerland.

The SwissLeaks files have already been used by the French government to track down tax evaders and were shared with other states in 2010, leading to a series of prosecutions.

In London, chief political commentator Peter Oborne announced his resignation from the Daily Telegraph as he accused the broadsheet of suppressing negative stories about HSBC to keep the valuable advertiser happy.

The Telegraph denied the accusations.

source: www.abs-cbnnews.com

Meet the banker-priest in eye of SwissLeaks storm

LONDON - The man at the centre of the SwissLeaks tax scandal in Britain is a soft-spoken Church of England clergyman who turned HSBC into Europe's biggest bank, and was once seen as a model of ethics in finance.

HSBC's former chief executive and chairman, Stephen Green, used to be courted for his advice by politicians of all stripes and by the Anglican hierarchy, but now he finds himself widely shunned.

The ex-banking titan was pursued down a London street by a BBC journalist this week in the wake of the revelations, refusing to answer questions.

"I'm not prepared to make any comments about HSBC business past or present," the 66-year-old Green said before walking off, clutching his briefcase.

Growing pressure may force him to change his mind.

Green has been asked to testify before a British parliamentary committee which is investigating who knew what, when about alleged tax dodging strategies on accounts containing tens of billions of pounds.

The fall from grace has been particularly astonishing for a man praised for steering HSBC through the global financial crisis without the bailouts using taxpayer money that other banks resorted to.

'Powerful philosophy'

The son of a lawyer, Green began his career with the management consultancy McKinsey in 1978 and joined HSBC in 1982, rising to the top of an institution with its historical roots in the British empire.

As he rose through the ranks in his 28-year career with the bank , he was also ordained as an Anglican clergyman in 1988. He has spoken frequently about the need for an ethical approach in banking.

He has written a book entitled "Serving God? Serving Mammon?" about how to reconcile being a Christian with working in finance, as well as calling for "enlightened" capitalism.

The links between the Church of England and the world of business are not so unusual and there are many ordained clergy in secular employment.

Since his retirement, Green has also advised the Church of England on how to reform its hierarchy -- putting forward proposals that have proved controversial as being too business-minded.

In a letter in the Guardian this week, a fellow clergyman, Reverend Paul Nicolson from the campaign group Taxpayers Against Poverty, criticised Green.

"The Rev Stephen Green’s chairmanship of HSBC while legal tax avoidance and illegal tax evasion were taking place raises important questions for the Church of England about the role of all clergy in secular employment," Nicolson wrote.

The focus of the political controversy over Green, however, has been his time in government in a period after the revelations about HSBC's Swiss private banking arm first surfaced in 2007.

In September 2010, Green announced he would join Cameron's coalition government as an unpaid minister of state for trade and later that year, he was made a life peer as Lord Green of Hurstpierpoint.

Conservative Prime Minister David Cameron, however has pointed out that the HSBC revelations first came out when the opposition Labour party was in power.

They too have worked with Green, who was a top business advisor to former prime minister Gordon Brown.

When he was appointed to government in 2010, business secretary Vince Cable said Green was "one of the few to emerge with credit from the recent financial crisis.

Green, he said, was "somebody who has set out a powerful philosophy for ethical business".

source: www.abs-cbnnews.com

Meet the whistleblower 'who terrifies the rich'

PARIS - Herve Falciani was once just an IT worker at a big bank, but since running off with hundreds of thousands of damaging documents from banking giant HSBC he has been alternately called a hero and a thief.

"He is brave. We have the highest opinion of Mr. Falciani's work, whatever his motivations may be. He has served the public interest," said Eric Alt, vice president of the French anti-tax fraud group Anticor.

Swiss authorities however have charged him with data theft for taking the documents that became the basis for the SwissLeaks revelations this weekend.

The cache of documents claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing $119 billion (104 billion euros).

Life was not always so complicated for the 43-year-old Franco-Italian, but later twists would be worth of a spy novel, according to Le Monde journalist Gerard Davet.

He started off working in a Monaco casino in the 1990s, before becoming an IT worker for HSBC in 2000. When he moved to the bank's offices in Geneva in 2006 his life would take a major turn.

The so-called "Snowden of tax evasion" and "the man who terrifies the rich" obtained access to a massive database of encrypted customer information.

In 2007 Falciani took the names of over 120,000 clients and by 2008 headed for Lebanon with his mistress and a plan to sell the data. Swiss authorities described it as "cashing in."

Yet suspicious bankers in Lebanon were not interested in buying the dubiously sourced client list, and at least one instead tipped off counterparts in Switzerland to Falciani's activities.

After his plan to sell the data fell apart, Falciani got in contact with European fiscal authorities and began passing them the pilfered information, which prompted numerous tax evasion audits.

Though he remains wanted on data theft charges, France and Spain have offered him protection by refusing to extradite him to Switzerland. He did, however, spend a couple months in a Spanish prison in 2012 at Switzerland's request before winning his release for helping Spain track down its tax cheats.

Falciani even made an unsuccessful run in May's European Parliament elections as a candidate for Spanish protest party, Partido X.

These days Falciani makes 3,500 euros a month (over $3,900) in exchange for lending his scientific expertise to French tax authorities. His paychecks come from France's national computer technology institute INRIA, where he has been a researcher for the past few years.

In comments to the French Senate in July 2013 he said he represents "a threat to the most precious asset of private banks: their reputation."

In an interview on Monday with Swiss public broadcaster RTS, he said far more needed to be done to protect whistleblowers like himself, including financial support.

"You must not be naive. We are made of flesh and bones... we cannot do this merely with the energy of our own despair," he said.

source: www.abs-cbnnews.com

Leaked bank files show HSBC 'helped clients dodge taxes'

LONDON - A cache of secret bank files shows that HSBC's Swiss banking arm helped wealthy customers avoid taxes and hide millions of dollars, according to a report by a network of investigative journalists released Sunday.

The files, analysed by reporters in the International Consortium of Investigative Journalists (ICIJ), showed that British banking giant HSBC provided accounts to international criminals, corrupt businessmen, politicians and celebrities.

"HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws," ICIJ reported.

The files list a range of former and current politicians from Britain, Russia, India and a range of African countries, Saudi, Bahraini, Jordanian and Moroccan royalty, and the late Australian press magnate Kerry Packer.

The revelations are likely to stoke calls for a crackdown on sophisticated tax avoidance by the wealthy and by multinational companies, a key political issue in Britain and Europe.

Notes in the files indicate HSBC workers were aware of clients' intentions to keep money hidden from national authorities.

Of one Danish account holder collecting cash bundles of kroner, an employee wrote:

"All contacts through one of her 3 daughters living in London. Account holder living in Denmark, i.e. critical as it is a criminal act having an account abroad non declared."

In another memo, an HSBC manager discusses how a London-based financier codenamed "Painter" and his partner could avoid Italian tax.

"The risk for the couple is, of course, that when they return to Italy the UK tax authorities will pass on information on them to the Italian tax authorities. My own view on this was that ... there clearly was a risk," the employee wrote.

HSBC did not immediately respond to a request for comment, but told the ICIJ: "We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today."

Richard Brooks, a former tax inspector, told the BBC: "I think they were a tax avoidance and tax evasion service. I think that's what they were offering."

Businessmen, politicians, designers, models

The investigation was done by the ICIJ, linked to the US-based Center for Public Integrity, who enlisted more than 140 journalists from 45 countries in cooperation with France's Le Monde, Britain's BBC and The Guardian, US programme 60 Minutes, German newspaper Suddeutsche Zeitung and more than 45 other media organisations.

Names in the files include people sanctioned by the United States, including Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin targeted by sanctions over Ukraine.

Alguadis told the ICIJ it was prudent to keep savings off-shore, while a spokesman for Timchenko said he was fully compliant with tax matters.

Former Egyptian trade minister Rachid Mohamed Rachid, who fled Cairo during the 2011 uprising against former president Hosni Mubarak, is listed as having power of attorney over an account worth $31 million, according to the files. He did not respond to requests for comment from the ICIJ.

Other individuals named include the late Frantz Merceron, an associate of former Haitian president Jean Claude "Baby Doc" Duvalier, and Rami Makhlouf, cousin of Syrian President Bashar al-Assad. Makhlouf did not respond to a request for comment from the ICIJ.

Also named were designer Diane von Furstenberg, who told the ICIJ the accounts were inherited from her parents, and model Elle Macpherson, whose lawyers told the ICIJ she was fully in compliance with UK tax law.

Formula One driver Valentino Rossi, listed as having $23.9 million in two accounts, said he had regularised his tax situation with Italian authorities.

Formula One businessman Flavio Briatore is connected to 38 bank accounts that held as much as $73 million between 2006-2007, according to the ICIJ. His lawyer told the ICIJ Briatore's accounts were legal and complied with tax laws.

The files are a version of a set obtained by former HSBC employee-turned-whistleblower Herve Falciani, who copied thousands of bank documents before fleeing from Switzerland to France, where they were obtained by tax authorities in 2009.

They were used by the French government to track down tax evaders and shared with other states in 2010, leading to a series of prosecutions for tax evasion.

HSBC Private Bank, the Swiss subsidiary of the British banking group, is under formal investigation in a French probe into tax fraud.

In 2012, HSBC paid a record $1.9 billion fine in a settlement in a money laundering case, after a US Senate investigation found it was used to launder hundreds of millions of dollars for Mexican drug cartels.

source: www.abs-cbnnews.com

HSBC to pay $1.9B over money laundering

British bank HSBC Holdings PLC is to pay a record $1.9 billion in a settlement with U.S. authorities covering years of alleged money laundering, officials said.

The deal, to be announced Tuesday, stems from accusations the London banking giant transferred billions of dollars on behalf of terrorist financiers in sanctioned nations, including Iran, and let Mexican drug cartels launder money through the U.S. financial system, officials briefed on the matter told The Wall Street Journal, The New York Times and other news organizations.

The commercial and investment banking company, whose motto is "the world's local bank," is expected to forfeit nearly $1.3 billion as part of a deferred-prosecution agreement, the largest-ever U.S. forfeiture for a bank, said the people briefed on the agreement between HSBC and the U.S. Justice Department, Treasury and other federal agencies, as well as the Manhattan district attorney.

It is also to pay a civil fine of more than $650 million, the people said.

Prosecutors may exhibit some of the weapons connected to the HSBC activities in Mexico, a person familiar with the matter told the Financial Times.

As part of the agreement, HSBC will admit to violating the 1970 Bank Secrecy Act, the 1917 Trading With the Enemy Act and other U.S. laws intended to prohibit money laundering, a government official told the Journal.

The Bank Secrecy Act requires financial institutions in the United States to help U.S. government agencies detect and prevent money laundering, tax evasion and other criminal activities. The Trading With the Enemy Act restricts trade with countries hostile to the United States.

"We are cooperating with authorities in ongoing investigations," an HSBC spokesman told the Journal. "The nature of any conversations is confidential."

source: upi.com

Special Report: HSBC's money-laundering crackdown riddled with lapses

NEW YORK - Executives of HSBC Holdings Plc and its U.S. subsidiary are scheduled to testify Tuesday before a Senate panel about how the London-based banking behemoth, after years of run-ins with U.S. authorities over alleged anti-money laundering lapses, has cleaned up its act.

In anticipation of the hearing, HSBC Chief Executive Stuart Gulliver sent a message to employees earlier this week: "Between 2004 and 2010, our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior," Gulliver wrote. "It is right that we are held accountable and that we take responsibility for fixing what went wrong."

Gulliver's memo implies that the bank's problems ended in 2010. But a Reuters investigation has found persistent and troubling lapses in the bank's anti-money laundering compliance since then.

Moreover, the problems arose in the very operation meant to show regulators that the bank could effectively monitor the trillions of dollars flowing annually through its offices in 80 countries and territories.

In a sprawling, low-rise building abutting pasture land in New Castle, Delaware, HSBC's anti-money laundering staff review customer transactions and so-called alerts generated when the bank's monitoring systems spot a suspicious transaction. It also housed the "look-back" at thousands of old transactions that the U.S. Comptroller of the Currency ordered in 2010, after citing the bank for multiple anti-money laundering failures.

Former employees in the New Castle office describe a febrile boiler-room environment overseen by managers uninterested in investigating transactions with possible links to drug trafficking, terrorist financing, Iran and other countries under U.S. sanctions, and other illegal activities. Instead, they say, the single-minded focus was on clearing out the paperwork as fast as possible.

"There were multiple backlogs" of alerts, said Everett Stern, who worked in the New Castle building from October 2010 to November 2011. "The name of the game was to close as many as you possibly can."

Stern was a 26-year-old with a master of business administration degree when he joined HSBC as a compliance officer "to find suspicious activity," as he put it. Within months, he was named a department specialist in Middle Eastern transactions.

A NOVICE WATCHDOG

"I'm not an expert" in money laundering in the Middle East, Stern said. His appointment, he said, was symptomatic of larger disregard for investigative rigor in the office. "Anybody who submitted their name for something basically got approved for that specialty."

Stern said that in the course of his work, he came across many suspicious transactions. Some involved parties he suspected of having ties to Hezbollah and Hamas - Islamist groups that the U.S. considers to be terrorist organizations. When he alerted his superiors to these dealings, he said, his concerns were dismissed.

At one point, Stern said, he decided to take action on transactions linked to Palestine that he and some of his colleagues had noticed.

Stern sent an email to two superiors with the subject line, "Compliance error." In the email, Stern wrote: "I believe investigators in the department are unknowingly making a major compliance error. Over the last couple of months investigators have approached me about cases in the Middle East, especially in Palestine.… It appears that most investigators do not understand that the government of Palestine is the terrorist organization Hamas."

One of the bosses, Jeff Kraft, an anti-money laundering compliance manager, came bursting out of his cubicle. "Are you out of your f------ mind?" he said, according to Stern's recollection. "I should fire you right now."

Kraft insisted that Hamas was not a terrorist organization and that if government officials saw the email, the New Castle office would be shut down, according to Stern.

Hamas, which governs the Gaza Strip of the Palestinian Territories, has been designated a terrorist organization by the U.S. since 1995.

Kraft could not be reached for comment.

Stern was part of the New Castle operation employing regular HSBC staff to monitor current transactions and tackle a backlog of alerts. A second section comprised a task force - largely staffed with former law-enforcement officials working under contract - that was conducting the look-back the OCC ordered in 2010, investigating transactions up to several years old.

'JUST A FACTORY'

Several of these contractors, echoing Stern, said the effort was more cosmetic than concrete. One said that when an investigator couldn't track down information on a counterparty to a particular transaction, the investigator was told to close the case even if it seemed suspect.

"I was extremely, extremely disappointed with the ethical part of how they were handling it," said one former task force contractor. "It was just a factory the way it was handled. There was a lot of pressure to get investigations closed."

The contractor added: "If Congress and the regulators actually knew what was going on, they would have a fit."

Another contractor said supervisors "wanted quantity, not quality."

In response to questions about the work at New Castle, HSBC spokesman Robert Sherman said: "The quality of work in Delaware has been and still is consistent with our high expectations. … We have had and continue to have very high quality control and assurance procedures." Those procedures, he said, include regular reviews of the New Castle work by senior management and quality-assurance teams. A spokesman for the OCC, which ordered the look-back, declined to comment.

At Tuesday's hearing, the U.S. Senate Permanent Subcommittee on Investigations plans to deliver a withering review of problems at HSBC and transactions tied to Iran, terrorist financing and drug cartels, according to people familiar with a report the panel has drafted on its investigation.

Among those scheduled to testify is Stuart Levey, HSBC's London-based chief legal officer. Levey, a former top Treasury Department official skilled in terrorism finance, was hired in January in what was widely seen as a signal that the bank was serious about improving its anti-money laundering efforts.

The Senate investigation is only one of many in recent years to target HSBC's internal policing. In 2003, the Federal Reserve Bank of New York and New York state bank regulators ordered HSBC to better monitor suspect transactions. The Justice Department, the Federal Reserve, the OCC, the Manhattan district attorney and the Office of Foreign Assets Control have all been scrutinizing client activities and anti-money laundering compliance, the bank said in a May regulatory filing.

THE LOOK-BACK

On May 3, Reuters reported that U.S. Attorney offices in West Virginia and New York had been investigating the bank, and that the West Virginia probe had found widespread anti-money laundering problems, including a backlog of nearly 50,000 alerts of suspicious transactions.

In confidential documents reviewed by Reuters, a report on the investigations excoriated HSBC's anti-money laundering program for its "gullible, poorly trained, and otherwise incompetent personnel who were incapable of recognizing blatantly suspicious money laundering activities."

HSBC said in its May filing that it was likely to face criminal or civil charges related to the probes. People familiar with the situation said the Justice Department investigation could soon yield a fine that dwarfs the record $619 million Dutch bank ING agreed in June to pay to settle similar accusations.

The New Castle look-back, overseen by consultants Deloitte LLP, was manned by more than 100 former law-enforcement officials, bank examiners and others. Many of them were working under contract with outside anti-money laundering consulting firms.

The gig paid well - between $65 and $125 an hour - and some contractors said they were making upwards of $200,000 a year.

Typically - and in accordance with U.S. rules - banks use various computer-based systems to monitor transactions and trigger alerts on certain details - a high-risk country of origin, for example, or round dollar amounts. If the bank determines after further review that an alert warrants official scrutiny for potentially illegal activity, it files a suspicious activity report, or SAR, to U.S. authorities. If the bank determines that a SAR isn't necessary, the alert is deemed "cleared," and the case is closed.

In the HSBC look-back, one contractor said, many suspicious cases were "buried."

In one case, the contractor wanted to find out why 13 parties had wired a total of $1.3 million into an HSBC account in Hong Kong on the same day. He said that when he asked a Deloitte supervisor to request that the Hong Kong office provide information about the customer, he was told that decision rested with the HSBC manager in charge of the account.

'RIGOROUS AND THOROUGH'

The information never was provided, and the same contractor said he was later fired for not clearing enough alerts.

The look-back team held brief weekly meetings at which Deloitte overseers ticked off how many cases had been cleared and complained about delays. Several contractors said that investigators deemed slow on the job were fired.

"Deloitte's work for HSBC was rigorous and thorough," spokesman Jonathan Gandal said via email. "We cannot further comment on confidential client matters."

Saskia Rietbroek, an anti-money laundering consultant at AML Services International in Miami who was not involved in the New Castle operation, said the regulatory framework for look-backs can give banks an incentive to shirk.

"The bank is ordered to find suspicious transactions that should have been reported. The more unreported transactions they find, the higher the fine," she said. "So, do you think they will dig and dig until they find everything? It is more likely going to be a cursory review. It is a conflict of interest."

On October 18, 2010, 12 days after the OCC ordered the look-back, Everett Stern reported for work as a compliance officer in New Castle. Assigned to a "target monitoring team," his task was to plow through wire transfers and identify any that were suspicious.

Employees were given 60 days to resolve alerts, either by closing the case, placing the transaction "on watch," or filing an SAR. Stern said colleagues would intentionally focus on alerts from countries considered low-risk, such as Canada or France.

POACHING THE EASY TASKS

Employees competed for those files. "People would come in early just to poach from you," Stern said. Anything that originated from Latvia, Estonia, Russia, the Middle East or other areas deemed high-risk, "you just didn't want it - major headache."

Stern said many of his colleagues were even less experienced and less prepared for the job than he was. Some had worked in the same building when it was an HSBC credit-card processing center, he said, and had been hired directly afterward to help out with anti-money laundering compliance.

Stern plunged in, tapping his proficiency in computers and spreadsheets to find ways to review transactions and investigate alerts. He ordered a couple of books to learn more about money laundering.

"They didn't like all this digging around," Stern said.

In December 2010, the Treasury Department announced that it was targeting a financial network tied to Hezbollah. HSBC's Levey, then the Treasury's undersecretary for terrorism and financial intelligence, said at the time that the network included brothers Ali and Husayn Tajideen. A third brother, Kassim Tajideen, is a financier for Hezbollah. The directive also cited two companies tied to the brothers: a trade and real estate concern called Tajco and an African grocery-store chain called Kairaba Supermarket.

CELEBRATORY LUNCH

Aware of that announcement, Stern in January 2011 double-checked to confirm that the names were in a filter designed to catch specific names and words associated with wire transfers. The names were in place, and it appeared that the bank had no transactions linked to Tajco or Karaiba.

But digging further, and employing a spreadsheet he had developed on his own, he found transactions involving Tajco and Kairaba. Then he found the reason they had been missed by the filter: It catches only correctly spelled names, and in these dealings, Tajco was spelled Tajc.o.

When he told his superiors, one asked, " 'How much time did you spend on the Excel analysis?' " Stern recalled. "I was not commended for my efforts."

In May 2011, Stern offered to design a template for producing uniform reports about alerts. The next morning, his superior said in an email reviewed by Reuters: "I appreciate the effort, like the product, however what I will say is this: I struggle with the fact you indicate (Everett) you spent the entire morning working on this. The only thing we should be focusing on right now is clearing alerts (productivity + quality = SARS)."

In July 2011, Stern's office marked a milestone: Thousands of transactions had been cleared. A catered lunch was served.

Stern's frustration with his job grew, and he left the bank in November 2011. "I came into this job with such energy," he said. "I was like a balloon that got popped. I was really excited for the job."

source: interaksyon.com

Ayala Land, Ortigas group seal P15B deal

MANILA, Philippines (1st UPDATE) - Ayala Land Inc. (ALI) has sealed a P15-billion peso deal with a group led by Ignacio Ortigas for the development of the Ortigas family's land bank areas, including the Greenhills Shopping Center and Tiendesitas.

This, after the Ortigas group - or at least part of the family - blocked Henry Sy's attempt to take over one of the country's oldest real estate companies.

The Ortigas family consolidated its interest in their holding company by buying a 34 percent stake held by British banking giant HSBC, matching an earlier offer by Sy's SM Group.

The buyout of HSBC's stake gave the Ortigases time to think about their options while property giants SM and the Ayala groups wrestled for control of the urban property developer.

ALI said the deal will allow them to expand their list of business districts that already counts Makati, Quezon City and Bonifacio Global City.

"The partnership... was forged upon the invitation of the Ignacio R. Ortigas group," Ayala Land said in a press statement.

"We are privileged to be a part of this strategic alliance. We welcome the opportunity to participate in the development of these key areas in Metro Manila," ALI President Antonino T. Aquino said. "Many of our successful developments such as the Ayala Alabang, Cebu Park District, Bonifacio Global City, Trinoma, Nuvali, Abreeza Davao, and Centrio Cagayan de Oro were built on strong partnerships with various groups."

Ortigas & Company currently owns strategic land bank areas in the Ortigas Business District, Greenhills Shopping Center, Tiendesitas in Frontera Verde, Circulo Verde, and Capitol Commons.

PSE disclosure

In an earlier disclosure to the Philippine Stock Exchange on Friday, ALI said it had obtained authority from the board to negotiate and enter into a strategic alliance with the group led by Ignacio Ortigas for the purpose of allowing ALI to participate in OCLP Holdings Inc., the parent company of Ortigas & Co Ltd.

ALI said it had allocated an initial amount of P15 billion for this partnership and in the development of various properties and businesses.

"This opportunity comes with the invitation of the group of Mr. Ortigas and is in line with the company's expansion plan," the disclosure said.

It was earlier reported in that some Ortigas family members have started talking to the Ayalas, who are likewise of Spanish descent, to foil the entry of the SM group.

Strategic alliance

ALI said: "The strategic alliance is consistent with Ayala Land's thrust of expanding its operations to other areas within and outside Metro Manila through partnerships."

"Our company intends to contribute its expertise in building large scale mixed use developments to this partnership. This development project includes plans for residential, office, retail and hotel components," ALI said.

The Ortigas family members who bought the stake from HSBC - erstwhile the single biggest stockholder in the company - can not divest their stake under a lock-up period. But the deal effectively consolidated a controlling interest within the family which made it easier to sell an enlarged stake to a new investor.

"The existing stockholders which consist primarily of the Ortigas groups exercised their right of first refusal on HSBC shares on Ortigas Holdings Inc.," SM Investments Corp. Cora Guidote said in a text message Thursday night.

Banking sources confirmed that payment to the stake was paid to HSBC as of Thursday.

It was earlier reported that while certain factions within the Ortigas family were willing to take in SM Investment Corp. as a new investor while some preferred the Ayalas instead.

Industry sources said family members from both factions jointly out up funding to buy out HSBC's stake.

Ortigas Holdings was created when Ortigas & Co. Ltd. was converted from a limited partnership into a corporate entity, a restructuring that paves the way for the entry of a new investor, a stock debut or both. It had taken some time for the Ortigas holding firm to take this corporate route because of the diverse ownership, the old partnership being a very old entity whose shares of stocks had been passed on from one generation to another.

A key urban developer, Ortigas Holdings has 50 hectares of land spanning Quezon City, Pasig, San Juan and Mandaluyong, the crown jewel of which is the 16-hectare Greenhills property complex. Another 40 hectares of prime land can be added to its land bank, which include portions of Camp Crame (10 hectares) and Camp Aguinaldo (30 hectares), which were donated to the government years ago but which it has the right to buy back if the government vacates the area in the future. - with a report from ANC

source: abs-cbnnews.com

HSBC hit with record fine for ripping off elderly

LONDON — Britain's financial regulator slapped a record 10.5 million pound ($16.4 million) fine on HSBC on Monday for mis-selling investments to pay care home costs for older customers.

Europe's biggest bank is likely to pay another 29.3 million pounds in compensation to "particularly vulnerable" elderly clients, who were given inappropriate advice by HSBC's NHFA subsidiary, the Financial Services Authority said.

The advice was unsuitable because in many cases the life expectancy of customers was below the minimum recommended five-year investment period.

The average age of NHFA's clients was almost 83. One client was 94 at the point of sale and had a life expectancy of 3 years and 3 months, the FSA said.

The fine, the biggest-ever for a retail banking offense, comes at a time of low public trust in banks following the financial crisis, which required taxpayers to bail out lenders in several countries.

British banks are already having to pay billions of pounds to compensate customers wrongly sold payment protection insurance (PPI), which allowed borrowers to keep up debt repayments in case of loss of income.

"NHFA was trusted by its vulnerable and elderly customers. It breached that trust to sell them unsuitable products. This type of behavior undermines confidence in the financial services sector," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.

HSBC said on Monday it is cutting 550 UK jobs as it reorganizes due to "the very challenging economic environment."

Banks are being forced to hold more capital and liquidity to make them safer, prompting many banks to review their business model. Most job losses are in its commercial bank arm, and about 220 of the positions being cut will be redeployed in the bank.

The losses are part of a plan to cut 30,000 jobs globally as chief executive Stuart Gulliver streamlines the business to make it more profitable.

‘Unsuitable sales’

NHFA was the leading supplier of independent financial advice on long-term care products in Britain, with a market share of near 60 percent.

The FSA said between 2005 and 2010 some 2,485 customers were advised to invest in its products, and unsuitable sales were made to about 87 percent of them. Some 285 million pounds was invested during the five-year period, or an average investment of 115,000 pounds.

HSBC Actuaries and Consultants Ltd (HACL) bought NHFA in 2005 and the business was transferred to HSBC UK Bank operations when HACL was sold in 2009.

NHFA gave advice through a network of between 15 and 31 advisers on structuring finances to meet care costs, and advised around 11,000 customers during the period under review.

"This should not have happened and I am profoundly sorry that it did," said Brian Robertson, chief executive of HSBC's UK business. "We are undertaking a full review of the advice given to impacted customers and I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged."

HSBC closed NHFA to new business in July, it said. — Reuters

source:gmanetwork.com