HSBC cuts legal spend by US$1bn

The global bank will, however, likely see a jump in legal spend in the coming years

HSBC cuts legal spend by US$1bn
HSBC cut its legal spend by nearly US$1bn in 2016 after an increase of US$500m in 2015, according to its annual report.

In most recent full fiscal year, the global bank saw legal costs, which cover “settlements and provisions in connection with legal matters,” decrease to US$681m from US$1.64bn. Globally, the bank tallied a 62% fall in pre-tax profits to US$7.1bn from US$18.9bn.

Among the bank’s major legal proceedings and regulatory matters in the past year is the Household International securities class action, which it has been involved in since 2002, which it settled for US$1.5bn last June.

The settlement means its legal spend will likely jump in the coming years.

HSBC is also involved in various litigation matters connected to Ponzi scheme mastermind Bernard Madoff, with litigation in the US, the UK, Bermuda, the Cayman Islands, Luxembourg, and Ireland. It is also involved in US mortgage-related investigations, US mortgage securitisation activity and litigation and anti-money laundering and sanctions-related matters in the US and the UK.

The company also faced tax-related investigations in the US, France, Belgium, Argentina, and India. It is also embroiled in the Panama Papers controversy; London interbank offered rates, European interbank offered rates and other benchmark interest rate investigations and litigation; foreign exchange rate investigations and litigation in the US, the EU, Switzerland, Brazil, South Korea, and South Africa; and the FIFA-related investigations.

HSBC recently conducted a legal advisory panel review, adding Davis Polk & Wardwell to its stable of law firms which includes Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Norton Rose Fulbright.

Related stories:
Law firms battle it out as BP’s new GC launches panel review
Firms act on Reckitt Benckiser’s $23.3bn buy of Mead John Johnson Nutrition

Recent articles & video

Dentons announced as legal partner of Australian Sporting Alliance for People with Disability

Banking and finance expert joins Msquared Capital as GC

Macpherson Kelley moves to new space in Sydney

Holding Redlich decorated in first-ever Best Law Firms – Australia

Thomson Geer partner: Bruce Lehrmann suit teaches a lesson about bringing unmeritorious claims

Australian Ethical picks up Altius Asset Management with KWM's guidance

Most Read Articles

Thomson Geer partner on the biggest impact of the Bruce Lehrmann defamation ruling

Thomson Geer partner: Bruce Lehrmann suit teaches a lesson about bringing unmeritorious claims

G+T guides Mitsubishi UFJ Trust and Banking on $2.1bn pickup of Link Group

HWL Ebsworth reveals new leadership and management structure