* Fined for "non-compliance with anti-money laundering
* Mexican regulator imposes $27.5 mln fine on HSBC
* HSBC slammed by U.S. Senate a week ago
By Steve Slater
LONDON, July 25 HSBC has been fined
$27.5 million in Mexico for lax controls in its anti-money
laundering systems, a week after a scathing U.S. Senate report
slammed the bank for letting clients shift funds from dangerous
and secretive countries.
Mexico's National Banking and Securities Commission (CNBV)
levied the fine against HSBC, Europe's biggest bank, due to its
"non-compliance with anti-money laundering systems and controls"
as well as its late reporting of 1,729 unusual transactions,
failing to report 39 unusual transactions, and 21 administrative
It is the biggest fine ever charged against a bank by the
CNBV, the Mexican regulator said.
The Mexican fine is separate from any settlement the bank
might reach with the U.S. Department of Justice.
That could run to as much as $1 billion, analysts have
estimated, based on a record $619 million fine that ING
agreed in June to pay to settle similar claims.
Last week, a U.S. Senate panel alleged that HSBC acted as a
financier to clients routing funds from the world's most
dangerous places, including Mexico, Iran and Syria, doing
regular business in areas tied to drug cartels, terrorist
funding and tax cheats.
The report slammed a "pervasively polluted" culture at the
bank and said between 2007 and 2008, HSBC's Mexican operations
moved $7 billion into the bank's U.S. operations.
HSBC ignored risks in doing business in countries like
Mexico, where drug trafficking is rife, the report said.
In a statement, the bank said, "HSBC Mexico apologises for
its failure strictly to comply with banking regulations, and
acknowledges that in the past, it has sometimes failed to meet
the standards that regulators and customers expect."
It said it had taken action to address the failures and
noted that Mexico remained a priority market.
HSBC is one of Mexico's top five banks, with more than 1,400
branches and 6 million customers. It has operated there since
the 1970s. In 2000, HSBC bulked up after buying Republic
National Bank and did so again in 2002 with a controlling stake
in Grupo Financiero Bital.
The problems at Europe's biggest bank have been known for
nearly a decade, but the Senate probe detailed just how sweeping
the problems have been.
The fine comes at a troubled time for Britain's banks, after
rival Barclays was fined $453 million by U.S. and UK regulators
last month for manipulating interest rates. More banks around
the world are expected to be fined as part of the probe into
By 1530 GMT, HSBC shares were up 1.1 percent at 516 pence,
outperforming a flat European bank index.