Tuesday, December 5, 2023

HSBC Chief: ‘Swiss Bank Claims Are Painful’

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Lisa Fischer
Lisa Fischer
Lisa Fischer is a seasoned journalist with a talent for uncovering hidden stories. With over nine years of experience, she has made a name for herself in the industry with her insightful reporting and writing. Lisa holds a degree in journalism from the University of Vienna and has worked for prominent Austrian newspapers. Her work has been recognized with several awards and she is committed to delivering thoughtful and thought-provoking journalism to her readers. Known for her persistence and integrity, Lisa is a valuable member of the Austrian journalism community.

Revelations about tax-dodging activities facilitated by the private wealth arm of HSBC have been painful and frustrating, the bank’s chief executive told staff on Friday as he conceded that it had failed to meet the standards expected of it.

HSBC chief executive Stuart Gulliv

In a memo to more than 250,000 employees around the world and seen by  Vienna Times, Stuart Gulliver said the media firestorm surrounding the operations of its Swiss private bank had obscured an overhaul of the group’s compliance and financial crime-fighting efforts.

“You have been working tirelessly and with great dedication to build a stronger HSBC with fully global businesses and functions, rigorous controls and the highest global standards, all underpinned by a clear strategy to serve our millions of loyal customers,” Mr Gulliver wrote.

“I share your frustration that the media focus on historical events makes it harder for people to see the efforts we have made to put things right.

“But we must acknowledge we sometimes failed to live up to the standards the societies we serve rightly expected from us.”

In his first remarks to the bank’s workforce since the scandal re-emerged this week, Mr Gulliver said that HSBC’s Swiss private bank had been “completely overhauled” since 2008, when a whistleblower, Herve Falciani, stole data relating to tens of thousands of accounts and passed it to French authorities.

The disclosure of the identities of some of those account-holders has sparked an international outcry, ensnaring a number of prominent political donors in the UK.

While many of the accounts were held legally, the details of tax-evading assistance given to wealthy customers by HSBC’s Swiss private bank has raised the prospect of new investigations by regulators in the UK, US and elsewhere.

Her Majesty’s Revenue and Customs is also facing scrutiny over the dearth of successful prosecutions of HSBC customers found to have evaded taxes, while David Cameron has been urged to disclose whether he knew about the scale of the issue when he appointed Lord Green, the bank’s chairman, as his trade minister in 2010.

In his memo to staff, Mr Gulliver said that media coverage had focused on 140 prominent names, “the vast majority” of whom were no longer clients of the bank.

One had ceased to be a client as long ago as 1991, he added, while 105 others were no longer with the bank.

Mr Gulliver, who took over at the helm of HSBC in 2011 after a stint running its investment banking operations, said that at its peak, the Swiss private bank had had roughly 25,000 clients – far fewer than the 100,000 mentioned in some reports.

The HSBC chief, who has had to secure a number of gruelling regulatory settlements since taking over, insisted that his new management team had “fundamentally changed the way HSBC is run, with much tighter central control”.

“HSBC has been putting in place tough, world-class financial crime, regulatory compliance and tax transparency standards, enforced by a compliance team of over 7,000 people, more than two times the number we had in 2011,” he wrote.

The number of clients at its Swiss private bank had been reduced by nearly 70%, Mr Gulliver added.

He said that HSBC “strongly supports government initiatives to exchange tax information”.

“We implemented FATCA, the US tax information disclosure regime, in 2014, and we are implementing the new global regime, the Common Reporting Standard, which is supported by 98 countries and comes into force from 2016.”

The HSBC chief added that the bank had “absolutely no appetite to do business with clients who are evading their taxes or who fail to meet our financial crime compliance or other standards”.

Mr Gulliver said that along with HSBC’s chairman, Douglas Flint, he had been asked to give evidence to a parliamentary committee, although he did not provide further details in the memo.

“We welcome the opportunity to explain everything we are doing to build the HSBC we all want to work for,” he wrote.

“I would like to reiterate my thanks to all of you for your dedication and hard work.”

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