AFP: Global bank HSBC, embroiled in a tax-dodging scandal at its Swiss division, said yesterday that Chief Executive Stuart Gulliver held a Swiss bank account as it reported a 15 percent drop in net annual profits.

The Guardian newspaper had reported Sunday that Gulliver, who has vowed to reform the troubled bank, kept millions of dollars in a secret Swiss account.
“Gulliver holds an account in Switzerland,” the London-listed lender said in a statement emailed to AFP.

“He opened the account in 1998 when he was living and working in Hong Kong to hold bonus payments,” it said, adding that the account was in the name of a Panamanian company “for reasons of confidentiality”.

“Full tax was paid in Hong Kong on the bonus payments. Gulliver has voluntarily declared his Swiss account to UK tax authorities for a number of years.”
Gulliver had moved to Britain from Hong Kong in 2003, and has since paid “full UK tax on the entirety of his worldwide earnings,” it added.

Allegations that London-based HSBC’s Swiss private banking arm helped clients in more than 200 countries dodge taxes on accounts containing 180 billion euros (US $ 204 billion) have caused a political storm in Britain before a tightly-fought general election in May.

HSBC apologised again yesterday over so-called “SwissLeaks” allegations that have tarnished the reputation of the British banking giant.

“The recent disclosures around unacceptable historical practices and behaviour within the Swiss private bank remind us of how much there still is to do and how far society’s expectations have changed in terms of banks’ responsibilities,” it said.

The bank also revealed yesterday that 2014 earnings plunged in a “challenging year” that was blighted by fines and compensation for mis-selling.

Earnings after taxation or net profits sank 15 percent to US $ 13.7 billion (12.0 billion euros) in 2014, HSBC said in a separate results statement.
That compared with US $ 18.7 billion in 2013 when its performance was also boosted by disposals.

Pre-tax profits tumbled 17 percent to US $ 18.7 billion, which dashed expectations and sent HSBC’s share price sliding more than 3.0 percent in morning deals in London.

“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,” Gulliver said in the earnings release. “Profits disappointed, although a tough fourth quarter masked some of the progress made over the preceding three quarters,” Gulliver added.

“Many of the challenging aspects of the fourth quarter results were common to the industry as a whole.”