HSBC warns it could take years to settle Madoff case as bank takes $1.1bn hit

HSBC Faces Long and Winding Road in Settling Madoff Case as $1.1bn Provision Hits Profits Hard

HSBC's financial woes are set to linger for a while longer, with the bank warning that it could take years to finally settle its lawsuit over the Bernard Madoff Ponzi scheme. The London-based lender took a significant hit of $1.1 billion, which wiped out 14% from its pre-tax profits, leaving them at a mere $7.3 billion for the three months ended September.

The bank's finance chief, Pam Kaur, acknowledged that the case is complex and may take time to resolve. "This will take a period of time to go through," she said. "It could take months, it could take years." This sentiment is echoed by Kaur's cautionary note that the $1.1 billion provision figure is not a fixed number but rather an estimate based on expert advice.

The case against HSBC stems from its administrative services to funds invested with Madoff Securities. The bank has already taken a provision of this size, and now it plans to file a further case in the Luxembourg court of appeal if that fails. The outcome could lead to more expenses for the bank.

Madoff's Ponzi scheme is infamous for defrauding thousands of investors of approximately $65 billion. While HSBC has provided services to some funds affected by Madoff, the bank maintains its exposure to the private credit market is relatively small.

However, Kaur and the bank's CEO, Georges Elhedery, are aware of the potential risks emanating from this sector, particularly given recent bankruptcies in the US and warnings from international regulators. The International Monetary Fund has expressed concerns that a downturn could destabilize traditional banks reliant on loans to shadow banking entities.

HSBC aims to distance itself from these vulnerabilities by focusing on its core strengths and streamlining operations. Elhedery stated: "We are becoming a simple, more agile, focused bank." Despite taking provisions for historical matters, the lender remains committed to helping customers navigate changing economic conditions.

The case serves as a reminder of HSBC's ongoing struggles with legacy issues from past scandals. As the bank navigates this complex and uncertain landscape, it will be crucial to monitor its exposures and remain vigilant in maintaining strong risk management practices.

I don’t usually comment but I think it’s crazy that one big mistake can affect an entire bank like HSBC . $1.1 billion is a huge chunk of change, and now they have to deal with the fallout for years? It's like, what even happened over there? Anyway, it's good that they're trying to distance themselves from past issues and focus on being more agile and focused. But at the same time, I'm worried about all these risks in the private credit market... can't we just have a simple banking system for once?

omg u guys, hsbc is really struggling rn they're basically saying it could take yrs to settle madoff case lol what's next? but seriously, 1.1 billion hit to profits is crazy and i think kaur was being super diplomatic when she said it's an estimate like, c'mon, be honest with us, how long does it really take to pay off that kind of debt? anywayz, hsbc needs to get their act together ASAP and stop worrying about legacy issues like, they've been dealing with scandals for ages already

i feel like hsbc is being really realistic about the time it takes to settle madoff case, $1.1bn provision is huge tho its not just a matter of months or years, it could be 5+ years if all lawsuits fail... and thats on top of their existing issues with legacy scandals gotta keep an eye on how they manage these exposures

man, hsbc is really digging itself into a hole with madoff... like, who knew they were so exposed? $1.1 billion is no joke but at the same time, i feel for them, they're just trying to clean up their act and move forward it's gonna be a long road ahead, imo, years of navigating this complex case and dealing with legacy issues... and what really gets me is that the bank is basically saying "hey, we're becoming more agile and focused" but i'm like, how can you just "forget" about all these scandals? it's like they think it's all gonna magically disappear anyway, gotta keep an eye on this one, 'cause it's bound to affect the global economy in a big way

Ugh, I'm so sorry I'm late to this thread ... but seriously, $1.1 billion is a huge hit for HSBC. I don't think it's fair that they have to deal with all these legacy issues from past scandals. It's like the bank is stuck in limbo and can't move on. And the fact that it could take years to settle this case? Yeah, that's not great for anyone involved... the customers, the investors, the bank itself. I hope they're able to get it sorted out ASAP, but it's hard to see a clear path forward right now .

I feel for HSBC, they're already dealing with so much on their plate. This Madoff thing is a huge headache . I get why it's taking them time to settle - it's a complex case, no doubt about it. But 14% wiped out from profits? That's not exactly what you want to see for your bottom line . They're trying to focus on their core strengths and streamline ops, but it's hard to ignore the elephant in the room . I hope they can get this sorted out soon so they can move forward with confidence... or at least make a profit without feeling like they're constantly bleeding money

Ugh , can't believe how long it'll take for HSBC to settle Madoff case lol, 5-7 years or more? $1.1 billion is a lot of money, I guess they're being cautious . They should've thought about that before providing services to those shady funds . It's not like it's going to be easy to recover from this one...

I'm telling you, something fishy is going on here... $1.1 billion provision, yeah right! It's like they're trying to hide something from us. And that finance chief Pam Kaur saying it could take years to settle? Sounds like a cover-up to me . HSBC is just trying to distract us with their "streamlining operations" talk... don't believe the hype, folks! They're just trying to distance themselves from those dodgy investments in Madoff's Ponzi scheme. And what about all these legacy issues from past scandals? That's like, too much of a coincidence, if you ask me . Mark my words, there's more to this story than meets the eye...

I'm still trying to wrap my head around this . $1.1 billion provision is a huge hit to HSBC's profits, but $1.1 billion could take years to settle? That sounds like a pretty big estimate to me... where did they get that number from? I need some more context on how the bank's finance team arrived at this figure, and what exactly makes it so hard to resolve the case? Also, isn't $14% wiped out of their pre-tax profits already a big deal? How will the bank make up for this in the long run?

I don't get why they're so worried about Madoff . I mean, $1.1 billion is just a tiny fraction of their profits . But at the same time, I can see how it's gonna be hard to settle this case . It's like, there's so much documentation and whatnot to go through . And with all these regulatory bodies breathing down their necks ‍, it's no wonder they're being cautious . Still, I'm a bit surprised they're planning to file another case in Luxembourg court of appeal ... seems like just more costs for the bank .

I'm like "yikes" when I hear about banks making huge losses... HSBC's $1.1bn provision is crazy! It's gonna take 'em years to sort this Madoff thing out, huh? The bank's got a lot of exposure to the private credit market and stuff. They're trying to be more agile and all that jazz, but it's hard to see how they'll escape this one... The whole situation just feels like a big headache

I feel for HSBC right now . They're already dealing with so much on their plate and then you add a $1.1 billion provision to the mix? It's like trying to put out one fire while another one's burning . And yeah, it's gonna take years to settle this Madoff case... I mean, 14% of pre-tax profits gone is huge . They need to stay focused on streamlining operations and core strengths if they wanna make it through this .

I'm not surprised though, these types of legacy issues come with the territory when you're dealing with big banks and scandals . It's a reminder that risk management is key... gotta keep an eye on those exposures and be proactive about maintaining strong practices . I just hope they can get this sorted out soon so they can start focusing on growth again .

OMG, 1.1 billion? That's crazy ! I mean, I knew HSBC was having some financial issues, but whoa... it's gonna take years to settle this Madoff case? I feel bad for the bank, they're trying their best but it's like they're stuck in quicksand . And $7.3 billion profits after that hit? That's not even a drop in the ocean compared to what they lost . I hope they can streamline their ops and focus on their core stuff , gotta stay agile in this banking world .

so i think hsbc is just trying to play it safe here... settling madoff case might take years but they gotta be proactive about those legacy issues . imo, the bank's focus on streamlining ops and core strengths is a good move . its like, they can't control everything that happened in the past, but they can prepare for the future . $1.1b provision hit is a big one tho... hope they can manage it without too much more damage

HSBC is really struggling with these Madoff thing and it's gonna take ages to sort it out... years even! their profits are already taking a hit from this $1.1 billion provision . I mean, they're trying to distance themselves from all the risks but it's hard when you got exposure in that sector . gotta watch out for those shadow banking entities, IMF said so . Anyway, it's good HSBC is focusing on core strengths and streamlining ops... maybe this will help 'em become a more agile bank . fingers crossed for them

HSBC needs to get its house in order , years might pass before they settle Madoff case and recover profits

HSBC is having a rough time right now . The bank's problems are rooted in its past mistakes, not just the Madoff case. They need to face their legacy issues head-on and stop trying to sweep them under the rug .

The fact that they're warning it could take years to settle the case is a big red flag . That's not reassuring for investors or customers who are already dealing with economic uncertainty . The bank needs to be more transparent about its risks and be prepared to make some tough decisions .

It's also interesting to see how HSBC is trying to distance itself from the private credit market, which seems like a risk-prone area . They need to focus on their core strengths and streamline operations to stay competitive .

This case serves as a reminder that banks can't just hide behind provisions and legacy issues forever . They need to take responsibility for their actions and be more proactive in managing risks .

Ugh , another major bank getting slammed by its own mistakes. HSBC is gonna have a long road ahead of them trying to sort out that Madoff mess. $1.1 billion provision hits their profits hard and it's not like they're out of the woods yet. They gotta deal with months or even years of lawsuit drama , which is just great timing considering their other financial woes.

I mean, who needs complexity when you can have unnecessary stress? And that's exactly what this case is - a headache for everyone involved. The bank's trying to distance themselves from the private credit market, but it's like they're trying to put out a fire with gasoline . Not exactly the most reassuring news for investors.

And let's not forget, this is just another example of how HSBC has been dealing with legacy issues . It's like they thought they could just sweep things under the rug and hope everyone forgot. Newsflash: we don't forget . The International Monetary Fund is already warning about potential destabilization in traditional banks, so this is a big deal. HSBC needs to get their act together before it's too late .