HSBC (NYSE:HBC) is bracing for more fallout from revelations by U.S. and U.K. regulators that the bank allowed dubious transactions believed to be money-laundering efforts by drug cartels and misled British customers about its financial products.

CEO Stuart Gulliver said that bank has put aside $700 million to pay fines resulting from the money-laundering charges in the U.S. A report issued by the U.S. Senate alleges that the bank permitted the transfer of $7 billion from Mexico to the U.S. between 2007 and 2008 without the required financial controls, the Associated Press noted.

U.S. regulators claim that the way the funds were transferred – in “bulk cash shipments” – should have raised red flags amongst bank officials, who failed to even report 39 transactions. The sheer volume of the cash transactions suggested illegal activity, likely drug sales, U.S. regulators claim.

The bank has also reserved $1.3 billion to cover potential U.K. charges that it deceptively sold loan insurance and interest rate hedging products to British customers and businesses.

In addition to the money-laundering and deceptive sales practices investigations, HSBC has also been implicated, along with more than a dozen other global banks — including Citigroup (NYSE:C) and JPMorgan Chase (NYSE:JPM) — in the LIBOR manipulation scandal that brought down Barclays‘ (NYSE:BCS) chairman and CEO earlier this month. No charges have been made against the bank yet.

HSBC also announced that it earned $8.44 billion during the first half of the year, down from $9.2 billion in the same period last year. Operating income increased 3.2% to $32.7 billion.

Shares of HSBC edged up 1% in early Monday trading in New York.