European banking heavyweight HSBC has agreed to pay nearly £230 million to settle a long-running investigation by French authorities into alleged tax fraud. The probe centred on the bank's French unit and its involvement in so-called 'cum-cum' trading schemes between 2014 and 2019.
The 'Cum-Cum' Trading Allegations
France's Parquet National Financier (PNF), the national financial prosecutor, accused the FTSE 100-listed bank of facilitating a complex financial manoeuvre. The PNF alleged that HSBC helped foreign investors evade taxes on dividend payments. The scheme involved shareholders temporarily transferring their stocks to the bank just before dividends were due.
This practice, known as 'cum-cum' trading, exploited special rules for banks that allow them to receive shares on loan. By using this method, investors could sidestep the taxes they would normally owe on stock profits. The €268 million settlement brings the investigation, which scrutinised activities from 2014 to 2019, to a close.
Bank's Response and Corrective Action
In a statement, HSBC said it was "pleased to have resolved this matter." The bank emphasised that the settlement recognised its cooperation with the French investigation and the corrective measures it implemented to address the historic issues.
"We continue to remain focused on serving our customers," the bank added. This substantial financial hit follows another major provision made by HSBC last year, when it set aside £830 million in its third-quarter results related to the historic Bernie Madoff fraud scandal.
Shareholder Backing for Hang Seng Privatisation
In a separate development announced on the same day, Thursday 8 January 2026, HSBC confirmed it had secured strong shareholder approval to take troubled lender Hang Seng Bank private. The proposal received near 86 per cent support from voting shareholders.
HSBC offered to pay HK$155 per share for the 36 per cent stake it did not already own, valuing the deal at approximately HK$106.1 billion (£10.7 billion). The bank's shares had fallen sharply in October after it announced the suspension of its buyback programme to fund the acquisition of minority shareholders in the Hong Kong bank.
The final decision now rests with the Hong Kong high court, which is scheduled to hold a hearing on 26 January to determine whether the privatisation can proceed.
