Banks keep sting in the curly little tail

The piggy banks are at it again. Commonwealth Bank is in full damage control mode, since it has emerged Australia’s biggest bank stands accused of committing no less than 53,000 breaches of anti-money laundering laws.

The bank’s “smart” ATM network is looking pretty stupid right now, as chief executive Ian Narev and his inner circle wipe the egg off their faces and a hefty chunk off their personal bottom lines (the bank has moved to slash executive bonuses to zero and directors face a 20 per cent pay cut, even as the bank looks to wiggle out of the worst of the charges by blaming errant algorithms, although with the bank posting a record $9.9 billion profit, there’s plenty of moolah washing around). Blatant crooks and terrorists are accused of shovelling cash into the maw of these ATMs at all hours of the day and night at some of the city’s biggest and most visible branches, while the powers that be ignored warnings from employees at various bank branches, according to court documents.

Home Truths nearly choked on our cornflakes when we read CBA had been shopped by its banking brethren over at HSBC Australia — Sky News reporter Leo Shanahan broke the story that HSBC could have played a crucial role in tipping off Australian and US authorities into alleged money laundering by organised crime gangs worth hundreds of millions of dollars to Hong Kong accounts.

Now, anyone who follows such things will be well aware that HSBC is the piggy bank nonpareil, and the global poster people for money laundering. Indeed, the Sydney headquarters of HSBC has been hosting regular soirees for a US government monitoring team as part of a deal struck to avoid criminal prosecution since it was revealed the bank was the money manager of choice for discerning Mexican and Colombian drug cartels.

Between 2000 and 2006 the US arm of HSBC was also found to have “knowingly and wilfully” processed payments worth $US660 million ($836m) “on behalf of banks and other entities located in Cuba, Iran, Libya, Sudan and Myanmar in violation of US sanctions”.

I was amazed HSBC didn’t get more of a pasting in the press when the “World’s Local Bank” hightailed it out of Thailand, along with a bunch of other Asian and south and central American countries, in the dead of night in 2012, post-GFC, leaving behind only its corporate banking operation and a bunch of baffled, irate retail banking customers.

I had front-row seats on the deal, as I was asked by Thailand’s fourth biggest bank, Krungsri, to pen grovelling letters to about 20 classes of HSBC cardholders to inform them they were now Krungsri customers, like it or not.

For many years, passengers arriving or departing at Thailand’s Suvarnabhumi Airport, and indeed many airports around the world, had to run the gamut of HSBC advertising every time they entered a skybridge, as the bank’s various incarnations of its world’s local bank positioning ran their course, regaling travellers with all manner of fascinating “local-global” factoids.

Here’s one I bet you never read: HSBC was the first commercial bank established in Thailand, in 1888, when it printed the country’s first banknotes.

Pulling its retail operations out of Thailand might have made short-term sense on the brutal bottom line but in terms of the bank’s heritage and positioning, it left a sour taste in the mouths of many.

Not long after this fly-by-night exit, I had to laugh when I stumbled across an article supplied by the Financial Times newspaper as a special service to HSBC’s private banking customers.

“The endless bustle of the tropical, sprawling South-East Asian metropolis makes it a career stopover rather than a lifelong destination for many expats,” began the story, which of course was about Bangkok. The headline: “Steamy city beguiles for a limited time.”

Like death and taxes, the only certainty is that the piggy banks have very thick skins and are experts at covering their porcine behinds. Expect the snouts to be back in the trough before too long.