HSBC is expected to pay £1.2bn to settle allegations that it allowed money to be moved to Iran and organisations with ‘terrorist’ links.

The anticipated $1.9bn settlement is higher than the $1.5bn US authorities warned it could take to settle the allegations made in a US Senate Homeland Security report in July this year.

The 300-page report detailed how HSBC got around restrictions on sending money to Iran. It also described the bank’s dealings with Saudi Arabian Al Rajhi Bank, some of whose owners were found to have links to financial organisations associated with terrorism.