HSBC has posted a 17 per cent fall in annual profits before tax to $18.68 billion (£12.14 billion) in 2014. It blamed the "negative effect" of "significant items including fines, settlements, UK customer redress and associated provisions" for the slide.
"2014 was a challenging year in which we continued to work hard to improve business performance while managing the impact of a higher operating cost base," HSBC chief executive Stuart Gulliver said in a statement.
"Profits disappointed, although a tough fourth quarter masked some of the progress made over the preceding three quarters. Many of the challenging aspects of the fourth-quarter results were common to the industry as a whole," he added.
The bank has been hit by a series of scandals, including the mis-selling of payment protection insurance (PPI), and allegations that its Swiss private bank helped clients evade UK tax using hidden HSBC accounts in Geneva.
HSBC's shares tumble
The Financial Conduct Authority (FCA) has recently announced it is looking into the HSBC bank over its Swiss tax-dodging scandal. It said it is working closely with the firm and other agencies which have an interest in this matter to ensure that any questions this may raise in relation to any current practices and culture of HSBC are addressed. The Treasury Committee also said it is to take evidence on the allegations.
The bank's share price fell more than five per cent today (February 23rd) after the publication of the results.
This comes a day after Stuart Gulliver was dragged into a tax row himself, with HSBC confirming he used a Swiss bank account to hold his bonuses.
"I'm UK tax resident, Hong Kong domiciled. I've paid full UK tax on the entirety of my worldwide earnings. It's not surprising as a 35-year HSBC veteran that I should be Hong Kong domiciled. I would expect to die abroad, which is a test of domicility," he said.
The chief executive saw his overall pay for the year fall to £7.6 million from £8.03 million in 2013. The lower sum is due to a smaller bonus of £3.4 million for the year, compared to £5.5 million in 2013.
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