Compliance, regulatory costs still a likely damper on HSBC earnings

New money laundering allegations will cast a shadow over HSBC when it announces its full-year earnings report today.

Monday will also mark the first time, after the fresh scandal, that HSBC stock is traded in the local market as it reopens after the Lunar New Year break.

During the past two weeks a flood of leaked documents have exposed tax dodging by the bank's Swiss unit and a digital paper trail across the globe.

HSBC chief executive Stuart Gulliver apologised in several full-page newspaper ads but that will do little to allay investors' fears over the investigations the bank now faces in 10 different countries and the potential for that number to grow.

"One can expect UK tax authorities, or those from a growing number of jurisdictions, to investigate thoroughly and robustly all matters in the public interest," said London-based Chrisol Correia, international head for anti-money laundering at LexisNexis Risk Solutions.

Fines and investigations took a heavy toll on the bank's earnings in the third quarter.

Provisions between July and September hit US$1.69 billion, a surprising 115 per cent spike year on year. Underlying profit before tax for that quarter fell 12 per cent to US$4.41 billion year on year and pre-tax profit for the first nine months of the year fell 9 per cent, also below analysts' expectations.