HSBC is the latest major bank to become embroiled in a potential new scandal in the financial services sector.
The group announced with third-quarter results yesterday it had been contacted by the Financial Conduct Authority (FCA) – the UK’s financial services watchdog – as part of a worldwide probe into foreign exchange trading.
It follows reports that traders at Royal Bank of Scotland and Barclays have been suspended in connection with the possible fixing of currency markets.
Barclays said last week it was co-operating with inquiries from various authorities and reviewing its foreign exchange trading activities over a period of several years to August this year.
HSBC said traders it had previously employed were involved in the probe but none of its current workforce was implicated.
It added it was co-operating with the investigations.
Last year, HSBC was forced to pay a £1.2billion fine to American regulators to settle an investigation into money laundering.
The FCA has joined other regulators around the world in scrutinising firms over potential manipulation of the £3trillion-a-day global foreign currency exchange market.
Switzerland’s FINMA announced last month it was investigating several of the country’s banks, while Hong Kong and the US are understood to have launched inquiries. UK banks are still reeling from the Libor inter-bank lending rate and payment protection insurance (PPI) mis-selling scandals, which are costing them billions of pounds.
HSBC’s results showed it put aside an additional £92million for PPI and £83million for interest rate protection during the three months to September 30.
The bank’s announcement that it was part of the FCA inquiry threatened to overshadow improving earnings for the business. Underlying pre-tax profits rose 10% to £3.17billion, compared with the same period last year.
Chief executive Stuart Gulliver said HSBC’s home markets in the UK and Hong Kong contributed more than half the profits.