HSBC legal spend fell by nearly $1bn in 2016, annual report shows
Bank's financial report reveals decrease in 'settlements and provisions in connection with legal matters'
February 23, 2017 at 06:54 AM
2 minute read
HSBC reduced its legal spend by nearly $1bn during 2016, according to the bank's latest annual report.
The expenditure for the calendar year, which the report says covers "settlements and provisions in connection with legal matters", reduced from $1.649bn (£1.3bn) in 2015 to $681m (£547m) in 2016.
Legal proceedings the bank has been party to in recent years include the Household International securities class action, which dates back to 2002. In June 2016, the bank agreed to pay $1.6bn (£1.3bn) to settle all claims relating to the lawsuit.
The report also details HSBC's involvement in the liquidation of Bernard L Madoff Investment Securities. The bank estimates that "possible aggregate damages that might arise as a result of all claims in the various Madoff-related proceedings is up to or exceeding $800m (£642m)".
In addition, the bank has estimated a provision of $1.2bn (£962m) for regulatory investigations into trading by HSBC on the foreign exchange markets.
HSBC recently completed a global panel review, with US firm Davis Polk & Wardwell winning a place on the roster. Existing panel members Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters were all reappointed alongside Norton Rose Fulbright.
HSBC's chief legal officer is former US government lawyer and litigator Stuart Levey, who succeeded Richard Bennett in the role in 2012.
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