HSBC dragged into probe of foreign exchange trade

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LONDON: A worldwide probe into suspected rigging of foreign exchange trading has reached HSBC, Europe’s biggest bank revealed on Monday as it announced also a jump in quarterly profits.

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The London-based bank revealed that global regulators are investigating a number of firms, including HSBC, “relating to trading on the foreign exchange market.”

HSBC added that it was “cooperating with the investigations which are at an early stage.”

It comes as the British bank announced a 28-percent increase in net profit to $3.2 billion (2.37 billion euros) during the three months to the end to September on major cost-cutting and lower bad debt charges.

HSBC had posted profit after tax of $2.5 billion in the third quarter of 2012.

“Revenue was stable in the third quarter [of 2013], influenced by the mixed global macroeconomic picture,” HSBC chief executive Stuart Gulliver said in a statement.

“Our home markets of the UK and Hong Kong contributed more than half of the group’s underlying profit before tax.”

Gulliver added: “Hong Kong continues to benefit from its close economic relationship with mainland China. We remain well positioned to capitalize on improving economic conditions in these markets.”

HSBC said it would continue to focus on reducing its cost base after savings of $400 million over the third quarter and total cuts since the start of 2011 of $4.5 billion.

HSBC, meanwhile, joins British banks Barclays and Royal Bank of Scotland (RBS) in saying that they are part of the foreign exchange market investigations.

Deutsche Bank, Swiss lender UBS and US pair Citi and JPMorgan Chase have also come forward to say that they are cooperating with regulators over the affair.

According to sources close to the matter, Barclays has suspended six traders while it investigates the possible manipulation of foreign exchange markets, and RBS has suspended two.

AFP

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