HSBC Holdings will recognize a $1.1 billion provision in its third-quarter results due to a Luxembourg court ruling related to the Bernard Madoff investment fraud. The bank became involved in the scandal as a service provider to funds that invested with Madoff. The Luxembourg Court denied an appeal by HSBC’s Luxembourg unit but accepted an appeal on a separate cash restitution claim. HSBC will pursue a second appeal and contest the amount to be paid. The provision will impact the bank’s common equity tier 1 capital ratio by around 15 basis points. The eventual financial impact could differ significantly from the current estimate.

Read more at Yahoo Finance: HSBC to book $1.1 billion provision after Luxembourg court ruling in Madoff case