HSBC's falling profit hits shares with bank mired in tax scandal

HSBC Holdings Plc, struggling to contain a scandal over tax evasion at its private bank, reported lower- than-expected fourth-quarter profit as costs and conduct provisions rose. The shares slumped the most since 2011.

Pretax profit dropped 56 percent to $1.7 billion from the year-earlier period, London-based HSBC said in a statement on Monday. That missed the $3.7 billion average estimate of five analysts surveyed by Bloomberg. Full-year profit fell 17 percent to $18.7 billion, more than analysts forecast.

Chief Executive Officer Stuart Gulliver's efforts to spend billions on compliance and revive profit were eclipsed this month by a report from the International Consortium of Investigative Journalists showing details of how HSBC handled Swiss accounts for tax evaders and criminals. The CEO, 55, on Monday scrapped four-year-old profitability targets, blaming a "radically different" regulatory environment.