On Monday, HSBC posted its earnings. They were lower than expected due to a lawsuit, in which the bank may have to pay $1.6 billion in damages. HSBC is accused of recklessly or negligently selling bonds that were backed by mortgages. The Federal Housing Finance Agency, which funds Fannie Mae and Freddie Mac, accused HSBC of misrepresenting the quality of its securities. Other banks have been sued for the same charge. Due to compliance failings in Mexico, the bank has added an additional 1,600 compliance and auditory staff to its company. The shares for HSBC fell more than 4%. The bank experienced a 12% drop in revenues for the first half of the year in its emerging markets. HSBC is based in London. HSBC was able to decrease losses due to bad debts and the company’s cost cutting plan proved to be efficient. The banking company restructured according to its business strategy and cut $4.1 billion in costs. The restructuring included consolidating staff and customers. Pre-tax profits have been rising for the banking company, but still fall short of estimates. The bank plans to continue to expand in Asia, which accounted for 62% of the company’s profits.
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