HSBC escapes a fine of 33.6 million Euros

30 sep. 2019 English Section
HSBC escapes a fine of 33.6 million Euros

HSBC Holdings Plc, the biggest banking group, was partially exonerated in a case of manipulation of the Euribor, as the European General Court decided to revoke the fine of 33.6 million Euros levied upon the lender.

According to the international press, the court ruled that the fine has been established based on "inadequate arguments". In spite of this, the Court ruled that the bank was guilty of breaking the law.

HSBC has been fined by the antitrust regulatory authorities of the EU for the alleged manipulation of the Euribor. In that particular case, HSBC, Credit Agricole SA of France and JPMorgan Chase & Co. of the US have been fined a total of 485 million Euros (520 million dollars) by the European Commission in 2016. The three banks have denied the charges and challenged the ruling in court.

HSBC got the biggest fine in the case, being part of the cartel for just one month, JPMorgan, the biggest US bank being fined 337.2 million Euros, and Credit Agricole - 114.7 million Euros.

The banks have been accused of having agreed, between September 2005 and May 2008, to manipulate the Euribor interest rate, in order to influence the prices of several securities on a global level. According to the European Commission, HSBC, JPMorgan and Credit Agricole have violated EU antitrust laws.

In may 2014, the fines against the three banks were announced, while they continued to deny any wrongdoing. Therefore, delays in penalizing the banks have occurred.

Last week's ruling could support the decision of HSBC to distribute surplus capital to shareholders.

In August, HSBC announced it would eliminate approximately 4,000 jobs of a new restructuring program which also involves the dismissal of CEO John Flint just 18 months into his term.

"We have announced a restructuring plan which involves the elimination of 2% of the workforce, meaning 4000 jobs", HSBC CFO, Ewen Stevenson, said at the time, who added that the removal of those jobs concerned several high responsibility positions.

The decision to dismiss John Flint was surprising, described by the president of the bank as necessary to speed up progress of strategic priorities, such as the turnaround of its US operations.

Flint, aged 51, has led the retail and wealth management operations of HSBC prior to becoming CEO, in February 2018. His appointment was the first major decision made by the first chairman of HSBC, brought in from the outside, Mark Tucker, who joined the board of the bank at the end of 2017.

In the first six months of 2019, HSBC got a gross profit of 12.41 billion dollars, up 15.9% over the first semester of 2018.

The bank announced that it would buy back stocks worth 1 billion dollars.

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