Bloomberg reports that S&P reduced its outlook on HSBC Holdings’s long-term rating to negative from stable, according to a statement Thursday.
The lender set aside $700m in the first half to cover potential U.S. fines after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the U.S. financial system. London-based HSBC also made a $2bn provision to compensate clients wrongly sold payment-protection insurance and derivatives.
'Recent events suggest to us that the effectiveness of these controls may be in doubt', S&P said. The Senate findings 'may reflect not only entity-level failings, but, in our view, a potential failure of the group’s enterprise risk management and culture that may have prevented the escalation of known issues to group senior management'.
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image: © Howard Lake