HSBC has said 2014 was a "challenging year" after reporting a 17% drop in profit to $18.7bn (£12.2bn).

The bank blamed the negative effect of fines and settlements and UK customer redress for the sharp drop.

The results follow allegations, which emerged earlier this month, that HSBC had helped people evade UK tax using hidden HSBC accounts in Geneva.

HSBC chief executive Stuart Gulliver saw his overall pay for the year fall to £7.6m from £8.03m in 2013.

The lower total reflects a smaller bonus of £3.4m for the year, compared to £5.5m in 2013.

Chairman Douglas Flint's total pay increased to £2.5m from £2.4m for the year, but he did not receive a bonus.

On Monday, HSBC reiterated its recent apology for the conduct of its Swiss private bank, saying the historical practices and behaviour were "unacceptable".

"We deeply regret and apologise for the conduct and compliance failures highlighted, which were in contravention of our own policies, as well as expectations of us," it said.

The bank said restoration of trust in the industry "remains a significant challenge as further misdeeds are uncovered but it is a challenge we must meet successfully".

"When commentators extrapolate instances of control failure or individual misconduct to question the culture of the firm, it strikes painfully at the heart of our identity," it added.

Mr Gulliver's Swiss bank account

The revelations come after Mr Gulliver himself was dragged into the Swiss tax furore on Sunday, with HSBC confirming he uses a Swiss bank account to hold his bonuses.

HSBC said he opened the account in 1998 when he was living and working in Hong Kong and full tax was paid in Hong Kong on the bonus payments.

The bank was responding to a report in the Guardian that Mr Gulliver has £5m in the account which he controls using a Panamanian company.

The Guardian article does not suggest any wrongdoing on Mr Gulliver's behalf, but it will add to the questions over HSBC's activities in the tax advisory business.

Investigations

The Financial Conduct Authority, HMRC, Swiss prosecutors and MPs on the Treasury Committee are looking into the allegations that HSBC helped people evade UK tax using hidden HSBC accounts in Geneva.

The former director of public prosecutions, Lord Ken Macdonald, has warned that HSBC has left itself open to criminal charges in the UK over the tax-dodging scandal.

The QC said there were strong grounds to investigate the bank for "cheating" HM Revenue and Customs (HMRC).