CIMA revokes HSBC Mexico licence
The Cayman Islands Monetary Authority has officially revoked the banking license of HSBC S.A. (Cayman Islands Branch).
In a press release dated Friday, 1 March, the authority said that since last July the said bank had been under investigation to establish whether they had breached any local laws and regulations.
“In the Decision notice of 27 February, the CIMA revoked the Category B Banking license.
Following Section 18 (1) ( i) of the Banks and Trust Companies Law (2009 Revision), CIMA concluded that HSBC was conducting business in a manner detrimental to the public interest, the interest of depositors or of the beneficiaries of any trust or other creditors and that the direction and management of its businesses has not been conducted in a fit and proper manner,” read the announcement.
This follows recent reports that HSBC has handed million-pound pay packages to more than 200 staff in a year that saw it fined £1.2billion for money laundering.
According to the British press, Stuart Gulliver, who is the UK bank’s chief executive, picked up £7.4 million in pay and perks as a reward for bumper profits.
Similar seven-figure payouts went to 78 of his British-based staff.
Campaigners said the massive sums showed the ‘culture of entitlement was alive and well in the city’.
HSBC’s profits for 2012 hit £13.7billion – more than 10 times the amount it was fined for its US and Mexican operations channelling money for drugs cartels.
In an exclusive disclosure to Cayman Net News last September, then premier McKeeeva Bush intimated that the local operations of HSBC would be investigated, in the wake of the issues surrounding HSBC Mexico, which was the subject of a US regulators investigation for laundering funds of sanctioned nations including Iran and Sudan.
Once one of the most respected banking institutions in the world, HSBC is now battling to restore its reputation.
Although last year was hugely profitable, it was arguably the most humiliating in its 148-year history.
HSBC started life as the Hong Kong and Shanghai Banking Corporation in the Far East, before the HSBC parent company was set up in the UK in 1991.
The US financial regulators that fined it £1.2billion said the bank had such a ‘ringing endorsement’ from Mexican drug gangs that it became known as ‘the place to launder money’.
At the time Mr Bush said that having followed the press releases and the US Senate Report, he was well aware of the issues surrounding HSBC Mexico, which also has a class B banking license here in Cayman.
“Needless to say, as a government we are extremely concerned about the potential impact this could have on our jurisdiction. The actions or lack thereof by the bank officials and alleged misuse of the Cayman entity can undermine the jurisdiction’s hard work and accomplishments in the AML (anti-money laundering) regime,” he said in the statement released on 30 August last year.