By Alistair Smout and Sudip Kar-Gupta
LONDON (Reuters) - Britain's top equity index fell from 15-year highs on Monday as a drop in the shares of banking group HSBC (L:HSBA) weighed on the market.
The blue-chip FTSE 100 (FTSE) index was down by 0.3 percent at 6,897.24 points going into the close of the day.
It had initially risen 0.4 percent to a 15-year high of 6,943.61, just 0.1 percent shy of its record intraday high of 6,950.60 set in December 1999. But those gains were surrendered when HSBC, Europe's largest bank, reported a 17 percent drop in annual profit, sending its shares down 4.9 percent to near their lowest level since October 2012.
HSBC, Europe's biggest bank, has apologised for conduct and compliance failures at its Swiss private bank. It said on Monday that its chief executive holds an account in Switzerland.
The fall in HSBC's shares also pushed down its rival Standard Chartered (L:STAN), which fell 5.2 percent.
"The worry now is going to be the opening of regulatory investigations. The uncertainty will continue, and the downside is likely to persist," said LONTRAD managing director Zeg Choudhry, commenting on HSBC's results.
LLOYDS RISES
Rival bank Lloyds (L:LLOY) rose 1.3 percent.
Britain raised 500 million pounds through the sale of another 1 percent stake in the bank, which was bailed out during the financial crisis of 2007-2009, and traders were looking forward to Lloyds' likely announcement of its first dividend since that rescue later this week.
Nevertheless, the FTSE underperformed gains on rival European markets, such as Germany's DAX (GDAXI) which touched new record highs.
Euro zone finance ministers agreed in principle on Friday to extend Greece's financial rescue by four months, averting a cash crunch in March that could have forced it out of the currency area.
However, the accord requires Greece to submit by Monday a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period. Germany said it expected the plan to be "coherent and plausible".
Despite the uncertainty over Greece, many traders said it was only a matter of time before the FTSE hit record highs in the 7,000 point region.
ActivTrades chief analyst Carlo Alberto de Casa said the UK's economic recovery offered further support to the FTSE.
"The jobs and salaries figures released in the UK last week are supporting the FTSE, which is still in a bullish trend."
