The British bank HSBC is facing battles on multiple fronts. Already forced to apologize for helping clients hide their income from tax authorities, the bank also had to explain on Monday why its chief executive, Stuart Gulliver, went to lengths for years to hide his bonus, at least from his co-workers, Jenny Anderson writes in DealBook. On top of all that, HSBC, which generates much of its income from Asia, reported abysmal results for 2014, saying that its profit fell 15 percent, to $13.7 billion, compared with $16.2 billion in 2013.
The Guardian newspaper reported late Sunday that Mr. Gulliver held at least 5 million pounds, or $7.7 million, in a Swiss account through a Panamanian company until 2003. Mr. Gulliver said on Monday that the account was legal and that he had paid all the required taxes, but his maneuvers nevertheless compound a problem for the bank’s reputation, which is still dealing with the fallout from efforts by its Swiss private banking arm to help wealthy clients evade taxes, Ms. Anderson writes.
Mark Gilbert of Bloomberg View writes: “The cascade of recent revelations suggests HSBC still hasn’t learned its lesson and is more of a social menace than a social good. Mr. Gulliver’s personal tax arrangements may not be illegal, but they are surely ill-advised and inappropriate.” Unless Douglas Flint, HSBC’s chairman, “pulls off an Oscar-worthy performance at Wednesday’s parliamentary hearing, HSBC will only have itself to blame if the authorities decide the bank is too big to regulate and respond by seeking its dismemberment.”
Update on 26 Feb 2015 at 6.30 am
More than a tax problem : http://www.bbc.com/news/business-31590613
Major shareholders getting cranky: http://www.bbc.com/news/business-31618032