HSBC's Q1 profits have fallen 14% as the bank was hit by reserving for mis-sold payment protection insurance (PPI) and other restructuring fees.
HSBC has a $440m provision to meet PPI mis-selling claims, according to the Telegraph.
Profits were also affected by the cost of a failed US IT project and the cost of laying off employees in Latin America, together costing HSBC more than $140m.
HSBC reported pre-tax profits of $4.9bn (£3bn) for Q1, down from $5.9bn on Q1 2010.
The news follows the British Bankers' Association's decision that it would not appeal against the High Court’s dismissal of its judicial review on PPI mis-selling guidance.
BDO partner and national head of financial services Tim Kirk said: “The withdrawal of banks and the BBA from their legal challenge to the FSA’s stance on PPI complaints, and provisioning being made for compensation, indicates an acceptance that the banks were losing the battle in the courts and the battle for public opinion.
"As the biggest seller of PPI, once Lloyds Banking Group withdrew from the battle, a full retreat was always inevitable."
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