HSBC is in talks to settle with US regulators over a money laundering investigation, but increased regulatory scrutiny has led to S&P cutting the bank's credit rating.
S&P cut its outlook on HSBC from stable to negative and said the findings of a US Senate probe "may reflect not only entity-level failings, but [...] a potential failure of the group's enterprise risk management and culture that may have prevented the escalation of known issues to group senior management."
The bank and the Manhattan District Attorney were aiming to conclude talks to settle the investigation by September, but may have been slowed when New York regulator Benjamin Lawsky accused Standard Chartered of laundering $250bn for Iran, according to Bloomberg.
Standard Chartered agreed to pay $340m in August to settle the New York state matter.
HSBC, meanwhile, put aside $700m in July to cover any US fines after a Senate Committee accused it of laundering money for terrorists and drug cartels, though CEO Stuart Gulliver has since said that figure may increase.
US Senate investigators documented transactions with Iran and others with North Korea, Cuba, Sudan and Burma, all of which are subject to sanctions administered by the Office of Foreign Assets Control.
From 2000 to 2009, HSBC also gave its lowest risk rating to Mexico despite "overwhelming information" that it posed a high risk for drug trafficking and money laundering, Senate investigators wrote in their report.
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