# HSBC takes US$1.1bn provision after Luxembourg court ruling

- Link: https://www.directorstalkinterviews.com/hsbc-takes-us1-1bn-provision-after-luxembourg-court-ruling/4121222902
- Published: 2025-10-27T07:18:38+00:00
- Author: Amilia Stone

In a 2009 lawsuit in Luxembourg relating to the Bernard L. Madoff Investment Securities
LLC fraud, HSBC Securities Services Luxembourg (HSSL) is defending a claim brought
by Herald Fund SPC (Herald) for restitution of securities and cash. For prior disclosure
on this matter, please refer to page 98 of the [HSBC Holdings plc](https://www.directorstalkinterviews.com/ftse-company/hsbc-holdings-plc/hsba.l)
2025 Interim Report (https://www.hsbc.com/investors/results-and-announcements).

On 24 October 2025, the Luxembourg Court of Cassation denied HSSL’s appeal in respect
of Herald’s securities restitution claim, but accepted HSSL’s appeal in respect 
of Herald’s cash restitution claim. HSSL will now pursue a second appeal before 
the Luxembourg Court of Appeal.

If HSSL is unsuccessful in that second appeal, it will contest the amount HSSL is
required to pay in subsequent proceedings before the Court of Appeal.

Following this development, **HSBC Holdings plc** ([LON:HSBA](https://www.directorstalkinterviews.com/ftse-company/hsbc-holdings-plc/hsba.l))
will recognise a provision of US$1.1bn in its consolidated financial results for
Q325, an around 15 bps impact on the Group’s CET1 capital ratio. Given the pendency
of the second appeal and the complexities and uncertainties associated with determining
the quantum of restitution, the eventual financial impact could be significantly
different. The provision will be classified as a material notable item and will 
not impact FY25 RoTE excluding notable items or any dividend.

HSBC’s Q325 results will be announced as planned on 28 October 2025.

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