HSBC's Stuart Gulliver comes out fighting

Profits may be down and his Swiss bank account may be splashed all over the news, but HSBC's chief exec is defending his corner.

by Rachel Savage
Last Updated: 09 Mar 2015

‘Well at least he practiced what he preached.’ So a cynic might sneer at the news HSBC’s chief executive Stuart Gulliver had a Swiss bank account registered by an anonymous Panamanian company.

The revelation, reported by the Guardian, comes after documents were leaked two weeks ago that allegedly showed its Swiss Private Bank helped thousands of wealthy clients evade taxes. And on the day HSBC released less-than-stellar annual results.

But instead of kowtowing to the criticism, Gulliver came out swinging. On his non-domicile status (non-doms are often accused of using it to avoid taxes) he was unapologetic. ‘I regard Hong Kong as home,’ he said on a conference call this morning. ‘I would expect to die abroad.’

And once his time as chief exec is up, Gulliver says he will be going back to the former British colony, where he lived from 1980 until he took the top job in 2011 (at the time there was talk he’d keep the CEO’s office in Hong Kong). But why did he bother with a Swiss account?

Not tax dodging – Gulliver said he paid all his dues - but privacy. In the 90s, everyone in HSBC’s Hong Kong office could see all of their colleagues’ bank accounts. But even the famously private Swiss system wasn’t enough for Gulliver – the Panamanian company was ‘to protect me from the Swiss staff’. The account was then closed in 2009 when his salary became publicly disclosed.

It’s clearly embarrassing for Gulliver and HSBC to have to air his dirty bank account laundry, but in a funny sort of way he might even be relieved. At least it deflects attention from the Swiss tax evasion allegations onto something that’s actually less controversial.

Oh, and from the 17% fall in pre-tax profit to $18.7bn in 2014, which it blamed on fines, settlements and redress for UK customers (even Britain’s most admired bank can’t escape the fallout from the scandals that have tainted the industry). That meant Gulliver took a £500,000 bonus cut this year, while £1.2m was clawed back from 2013, although he was still paid £7.6m in total in 2014. Shares were down 5.4% to 572.4p in mid-morning trading.

HSBC did still have to eat a healthy serving of humble pie over the Swiss scandal. ‘We deeply regret and apologise for the conduct and compliance failures highlighted which were in contravention of our own policies as well as expectations of us,’ it said in its results statement. ‘We will never knowingly do business with counterparties seeking to evade taxes or use the financial system to commit financial crime.’

It had better hope its systems are up to scratch now – HMRC is far less likely to sit on its hands/leaked documents for six years as it apparently did this time round.

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