May 4, 2017 / 7:45 AM / 5 months ago

HSBC says U.S. deferred prosecution impacting capital repatriation

LONDON, May 4 (Reuters) - HSBC’s deferred prosecution agreement (DPA) with the U.S. Department of Justice may impact the bank’s ability to repatriate some $8 billion in capital the lender has ‘trapped’ in the country, its finance director said on Thursday.

HSBC paid its first dividend in 10 years from its U.S. subsidiary to its parent in Britain in April, it said on Thursday, while announcing first quarter results.

“It would be unusual if the DPA’s existence did not reflect on the capital position,” Chief Financial Officer Iain Mackay told analysts on a conference call, adding that it would be “naive” of the bank to think otherwise.

Reuters in September 2016 reported that the DPA’s existence could impact the bank’s plans to move capital home from the United States.

The DPA is with the Justice Department while decisions about the capital plans of foreign banks in the United States are overseen by the Federal Reserve.

HSBC struck the deferred prosecution agreement in 2012 with the Department of Justice under which it would not be heavily punished for failures in anti-money laundering efforts, subject to the bank committing to improve controls.

Reporting by Lawrence White; editing by Jason Neely

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