THE collapse of Halifax Bank of Scotland has continued to haunt its auditor KPMG as its role scrutinising the accounts of HSBC was questioned at the large London bank's annual investor meeting.

A shareholder demanded reassurance about the role of Guy Bainbridge, KPMG's Edinburgh-based lead audit partner on HBOS until its rescue takeover by Lloyds Banking Group. Mr Bainbridge oversees HSBC. Nevertheless, KPMG's reappointment as auditor was backed by 92.86% of HSBC investors.

Louise Rice, a proxy for another shareholder, told HSBC's annual meeting in London's Barbican Centre she was concerned about KPMG's decision to clear HBOS's allocation of just £370 million in provisions for its corporate lending arm in May 2008, when the division's losses eventually amounted to £25bn.

Douglas Flint, the Glaswegian who chairs HSBC, said: "Guy Bainbridge has been our lead audit partner since 2010 and the audit committee [has] judged his performance to be extraordinarily diligent and of high integrity."

KPMG was not criticised by a report on HBOS's collapse by the Parliamentary Commission on Banking Standards, and a report being prepared by the City regulator has yet to be published. Mr Flint, previously HSBC's finance director, told shareholders the past year had been the most difficult of his career after HSBC was fined $1.9bn (£1.2bn) by UK and US regulators over money-laundering failings.

"We were humbled and horrified to discover failings of such magnitude," he said.

Chief executive Stuart Gulliver said: "We are doing everything we can to put right our past errors."

One investor held up an orange jumpsuit in protest at the lack of criminal sanctions for HSBC directors.

The bank also suffered the embarrassment of a 11% vote against its pay report after handing Mr Gulliver a package worth £7.4m for last year, including a £2m bonus, despite the problems.

Questioned by investors,Mr Flint said HSBC was likely to reduce its business in tax havens such as the British Virgin Islands. "We are undertaking a review, and have been for some time, into the extent of our activities in so-called tax havens," he said, but insisted there was legitimate business to be done in these locations.

Naturalist and broadcaster Bill Oddie challenged the bank over its financing of logging firms in Borneo. "There's a huge desecration, which at the root is funded by HSBC," he said.

Mr Gulliver urged Mr Oddie to work with HSBC on the issue. "Give us the chance to be a force for good," he said.

Mr Flint indicated HSBC's desire for the UK to remain within the European Union, amid Government moves to renegotiate the terms of membership.