HSBC’s share price in Hong Kong has fallen to its lowest level since 1995 amid allegations of money laundering.
The leaked secret files revealed that HSBC allowed fraudsters to transfer millions of dollars around the world even after it had learned of their scam. HSBC bank which is based in UK faces multiple pressures including political tension in Hong Kong and the pandemic fallout.
In Asian trading on Monday, HSBC’s share price fell more than 4% to below HK$30 (£3) as its freefall continued. In the current year share price has plunged by around 50% as bank is also listed on the London Stock Exchange,
Despite having HSBC headquarter in London, more than half of its profits come from the Asian financial hub of Hong Kong. Its role in an $80m (£62m) fraud is detailed in a leak of documents – banks’ “suspicious activity reports” – that have been called the FinCEN Files.
HSBC had been under pressure on multiple fronts which has weakened its share price even before the leaked files were revealed.
The biggest bank in Europe has set aside between $8bn and $13bn this year for bad loans as it expects more people and businesses to default on their repayments because of the coronavirus pandemic.
The bank reported a 65% drop in pre-tax profits to $4.3bn for the first half of the year in August which is much steeper than analysts had forecast.
The bank also became embroiled in a political battle over its support of China’s national security law in Hong Kong and was lambasted by both the US and UK. The bank is currently pushing ahead with a major restructuring of its global banking operations.
Noel Quinn, Chief executive who officially took over in March, said that the bank would further pivot into Asia as its European operations lose money. He said that the HSBC bank would “accelerate” an earlier restructuring plan which includes the axing of 35,000 jobs.
On the other hand, Standard Chartered Bank UK which was also named in the leaked files saw its Hong Kong share price fall in Monday Asian trading.