HSBC Holdings will take a $1.1 billion provision in Q3 results after losing part of an appeal in a lawsuit related to Bernard Madoff’s Ponzi scheme. The Luxembourg Court of Cassation rejected HSBC’s appeal, impacting its earnings and prompting plans for further appeal.

Europe’s largest bank is facing a potential $2.5 billion restitution claim by Herald Fund SPC, with an additional $5.6 billion in damages sought. The provision may slightly impact HSBC’s financial strength, but the bank is prepared to contest the amount to be paid, potentially affecting its common equity tier 1 capital ratio.

The fallout from history’s largest Ponzi scheme continues to affect banks like HSBC, which previously settled with Kalix Fund over Madoff-related losses. The scheme, which reached $64.8 billion, went undetected for years until Madoff’s confession in 2008, leading to his conviction and eventual death in 2021 while serving a 150-year prison sentence.

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