Loading

HSBC restructures ‘to clean up act’

February 7 2013 at 08:00am

Comment on this story

HSBC’s biggest ever restructuring had been necessary to simplify the bank’s complex structure and wide geographical spread, which had made it attractive to money-laundering criminals, chief executive Stuart Gulliver said yesterday.

“Our structure was not fit for purpose for a modern world,” Gulliver told legislators on a British banking inquiry.

HSBC was fined $1.9 billion (R16.8bn) in December, the largest ever paid by a bank, following a US investigation into its Mexican and US operations that made scathing criticism of its anti-money-laundering systems. The lax controls allowed two cartels to move $881 million in drug proceeds through the bank, according to US prosecutors.

“To be honest, our geographic footprint became very attractive to trans-national criminal organisations, whether they are terrorist in origin or criminal in origin,” Gulliver said.

After taking the helm at the start of 2011, Gulliver centralised control and created global business operations, taking much of the control out of the hands of regional managers.

“It’s the biggest organisational change in this firm since 1865 and we did it to deal with the weaknesses,” Gulliver said.

HSBC’s problems in Mexico stemmed from its purchase of Grupo Financiero Bital in 2002, which was bought cheaply as it was distressed. HSBC chairman Douglas Flint said that the bank was too slow to improve its systems and controls. – Reuters


sign up
 
 

Comment Guidelines


  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

 IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks
IOL Travel

Make sure you find the best available airfares with our easy-to-use search engine.

Travel_pic_enw
Sudoku