The fine is the largest penalty ever imposed on a bank from the Justice Department.
The Justice Department had accused HSBC Holdings PLC of illegally laundering money for Mexican drug cartels and with violating sanctions by doing business with countries including Iran, Cuba, Libya, Sudan and Myanmar, according to Reuters.
In a statement, HSBC Chief Executive Stuart Gulliver said: "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes."
Under new senior leadership over the past two years, Gulliver said, "we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."
Europe's largest bank aims to gain 70% of Nedbank's shares and plans to bid on insurer Old Mutual PLC's (PINK ADR: ODMTY) 52% stake, worth $7 billion. Nedbank is South Africa's fourth largest bank and focuses on commercial banking services, operating in 33 African countries.
The hot pursuit of South Africa's banking industry is fueled by the rapid trade growth the country is experiencing with Asia - especially China.
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