Why have HSBC profits fallen by nearly a fifth?

The bank’s 2014 results are pretty eye-opening

That old chestnut the “challenging year” was to blame for HSBC’s 17% drop in profits in 2014, the bank has said.

Fines and settlements to customers in the UK contributed to the sharp drop in profits to £12.2bn.

Stuart Gulliver, HSBC chief executive, had a pay cut too – from £8.03m in 2013 to £7.6m – because of a smaller bonus.

Stuart Gullliver, chief executive, HSBC

Chairman Douglas Flint’s total pay increased from £2.4m to £2.5m, although he didn’t pick up a bonus.

The news comes shortly after allegations HSBC used secret offshore accounts to help people evade tax.

The bank reiterated its apology today: “We deeply regret and apologise for the conduct and compliance failures highlighted, which were in contravention of our own policies, as well as expectations of us.

“When commentators extrapolate instances of control failure or individual misconduct to question the culture of the firm, it strikes painfully at the heart of our identity,” it added.

In fact, yesterday it was revealed Gulliver himself has used an offshore bank account to hold his bonuses since 1998.

Last week HSBC’s Geneva offices were raided by police looking into “suspected aggravated money laundering” and the bank is already facing criminal investigations in France, Belgium, the US and Argentina.

MPs are conducting an “urgent” investigation following the revelations. Public Accounts Committee chair Margaret Hodge said HSBC will be ordered to give evidence in the enquiry if necessary.

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