HSBC's Swiss arm to face French criminal investigation

The Swiss private banking arm of HSBC has been placed under a formal criminal investigation by French magistrates over alleged tax-related offences.

In a statement to the London Stock Exchange, the bank said the formal criminal investigation had been initiated in connection with the conduct of its Swiss Private Bank in 2006 and 2007 for alleged tax-related offences.

A massive €1bn bail was also slapped on the bank. Commenting on the legal notice, HSBC said: “The French magistrates' decision is without legal basis and the bail is unwarranted and excessive.”

The company intends to appeal adding that it would defend itself vigorously in any future proceedings.

The French investigation follows allegations against the bank earlier in the year that it’s Swiss banking had arm helped clients around the world evade taxes.

The company’s shares did not react negatively to the news trading up 2.33% or 13.80p at 600.70p at 14:32 BST on Thursday.