HSBC share price: Group no longer faces prosecution threat in US

Deferred prosecution agreement with DoJ expires

HSBC share price: Group no longer faces prosecution threat in US

HSBC Holdings’ (LON:HSBA) deferred prosecution agreement (DPA) with the US Department of Justice (DoJ) has expired, the Asia-focused lender has said. The expiry removes the threat of prosecution of the Asia-focused lender in the US over allegations of money laundering in Mexico.

HSBC’s share price has advanced in London in today’s session, having added 1.76 percent to 746.10p as of 12:51 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index standing 0.57 percent higher at 7,435.98 points. The group’s shares have added more than 10 percent to their value this year, as compared with an over six-percent rise in the Footsie.

DPA expiry

HSBC announced in a statement today that its five-year DPA with the DoJ had expired. The Asia-focused lender entered the agreement in 2012 and paid a $1.9 billion fine for failing to prevent Mexican cartels from laundering money through the bank. Europe’s biggest bank noted today that it had “lived up to all of its commitments,” and that under the DPA, the DoJ would file a motion with the US District Court for the Eastern District of New York seeking the dismissal of the charges deferred by the agreement.

“HSBC is able to combat financial crime much more effectively today as the result of the significant reforms we have implemented over the last five years,” the lender’s outgoing chief executive Stuart Gulliver said in the statement.

Asia-focused peer Standard Chartered (STAN) agreed last month to extend its DPAs with US authorities until July next year. The DPAs relate to processed payments for sanctioned entities in countries including Iran, Burma, Sudan and Libya.

Analysts on HSBC

Citigroup reiterated its ‘buy’ rating on HSBC last week, without specifying a price target on the shares. According to MarketBeat, the Asia-focused lender currently has a consensus ‘hold’ rating and an average price target of 687.67p. 

As of 13:43 GMT, Monday, 11 December, HSBC Holdings plc share price is 746.10p.

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