HSBC profits hit by misdeeds

Chief executive Stuart Gulliver’s tax affairs added to the gloom over the bank's disappointing results.

HSBC announced pre-tax profits for 2014 to $18.7bn, a 17% drop. Much of the decline stemmed from penalties for various past misdeeds. The group has now abandoned its return on equity target of 12%-15% and replaced it with a new one of 10%. It has ditched its cost-income ratio target of 50% completely.

But chief executive Stuart Gulliver's own tax affairs overshadowed the results, when it emerged that he previously held money in HSBC's Swiss unit through a Panamanian company while being based in Hong Kong. He said this was to prevent staff finding out how much he was paid before he joined the board.

What the commentators said

Nor does it square with the professed drive towards greater transparency, noted Alistair Osborne in The Times. He rightly doesn't seem to have had much confidence in the Swiss bank's ability to keep secrets, while also noting that the systems in Hong Kong were full of holes.

Slack controls played a key part in the money-laundering scandal; could they cause further trouble now that Gulliver has said he can't be expected to monitor what all 225,000 employees are up to?

"No one expects him to know everything," said the FT. But if he and his team can't take responsibility for the group's actions at its current size, "the answer is simple: they should shrink it until they can".

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