Since the laundering scandal has been discovered, HSBC cuts 47000 jobs in Europe. Around 35000 employees are layoff in global and try to cut its expenses. Moreover, HSBC tries to cut more employees about 1149 in the wealth management division in U.K. As well as, the shareholders have affected by the laundering scandal since the corporation has to pay the huge penalty to settle the money-laundering case.
Money laundering helps criminals evade justice, fuels the forces of crime and affects the social order seriously. Typically the so-called organized crimes always relate to certain transactions and funds. Gangsters are bound to raise the gang, then how can they raise it? No doubt money is indispensable, where is the money comes from? There might be a variety of illegal income such as drug trade, smuggling, kidnapping and so on. Moreover, the combination of money laundering and terrorist activities will cause huge losses on social stability, national security and people’s lives and property safety.
The scandal undoubtedly caused considerable reputation damage to HSBC. A report from the U.S. Senate has criticized HSBC to help customers transfer money illegally from Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria and other countries. HSBC was warned that the bank might face criminal or civil charges related to the investigation earlier in 2012. The report criticized that the corporate culture of HSBC was “contaminated”, pointing out that $ 7 billion was transferred to U.S. from Mexico illegally from 2007 to 2008. HSBC subsequently responded that the relevant question was “shameful and embarrassing”. HSBC CEO Stuart Gulliver said, “the report has no doubt caused serious reputation damage to HSBC, The extent to which that has resulted in loss of business is hard to measure, but it has undoubtedly damaged our brand.” He said that as the investigation continued, a number of employees have left HSBC, some employees were ordered to pay the salary as well. HSBC banking group saw its net profits drop nearly 17 percent in 2012, as it counted the cost of a hefty U.S.fine it paid to settle money-laundering claims. Additionally, the customers of HSBC may lose their trust on HSBC which is extremely derogatory to the reputation as well as the business of HSBC. The loss of customers that resulted from damaged reputation might bring negative impact on the annual revenue in the long term.
Enjoy the video:
HSBC prepared for fine but its reputation has been damaged
Work Cited
“HSBC Holding plc(HBC) Dividend History.” Dividata. Web. March 2013. 25 Apr. 2013.
<http://dividata.com/stock/HBC/dividend>
Mustoe, Howard.”HSBC Reputation’Crushed’by Mexican Money Laundering.” Bloomberg, 2013.Web. 25 APR. 2013.
<http://www.bloomberg.com/news/2013-02-06/hsbc-reputation-crushed-by-mexican-money-laundering-ceo-says.html>
“HSBC prepared for fine but its reputation has been damaged.” The Telegraph. Web. 2012. 25 Apr. 2013
<http://www.telegraph.co.uk/finance/9736798/HSBC-prepared-for-fine-but-its-reputation-has-been-damaged.html>
