LONDON — Neil Woodford, an influential fund manager in Britain, said on Monday that he had sold his stake in the British bank HSBC over concerns about rapidly escalating fines by regulators in the banking industry.
In a post on his blog on Monday, Mr. Woodford, the head of investment at Woodford Investment Management, said he was concerned about the fines that HSBC could face in connection with continuing investigations into potential manipulation of foreign exchange markets and global benchmark interest rates.
Industry fines, he wrote, “are increasingly being sized on a bank’s ability to pay, rather than on the extent of the transgression.”
Mr. Woodford said he had not invested in a bank since 2002, but began building a position in HSBC last year and included it in his portfolio when he started the CF Woodford Equity Income Fund this year.
HSBC declined to comment.
Mr. Woodford left Invesco Perpetual, a unit of the investment firm Invesco, in March to start his own fund after more than two decades with the investment firm.
“The size of any potential fine is unquantifiable, so this represents an unquantifiable risk,” Mr. Woodford said. “Nevertheless, a substantial fine could hamper HSBC’s ability to grow its dividend, in my view. I have therefore sold the fund’s position in HSBC, reinvesting the proceeds into parts of the portfolio in which I have greater conviction.”
HSBC was not one of the fund’s top holdings at the end of July, according to the fund’s website.
The bank accounted for about 2.68 percent of Woodford’s holdings at the end of July, according to Reuters, which reported Mr. Woodford’s comments earlier on Monday.
Shares of HSBC were down about 1 percent in afternoon trading in London on Monday, as European markets generally declined.
In August, Douglas Flint, the bank’s chairman, said increased regulatory scrutiny and duplication by regulators worldwide were eating into resources that would normally be focused on customers. He said there was a “growing fatigue” among employees amid the heavy regulatory scrutiny of the sector.
HSBC, which is based in London, relies on Asia for much of its earnings.
In August, the bank said first-half earnings fell 5 percent, to $9.75 billion, driven by declines in Asia and a slowdown in overall market activity.