By Linda Hall •
Updated: 31 Jan 2024 • 12:45
HSBC: The bank is headquartered in Canary Wharf, London
Photo credit: CC/Tintazul
HSBC must pay a £57.4 million (€67.2 million) fine for “serious failings” in protecting customer deposits.
The London-based bank excluded billions of pounds of customer deposits eligible for the UK’s Financial Services Compensation Scheme (FSCS), the Bank of England’s Prudential Regulation Authority (PRA) said.
Under this scheme, deposits are protected up to £85,000 (€99,467) but the PRA, which safeguards the Bank of England’s financial stability, detected massive HSBC exclusions between 2015 and 2022.
Banks must have systems and controls in place to ensure that financial information is accurately recorded should the FSCS need to compensate customers if a bank were to collapse.
The PRA inspection revealed that an HSBC subsidiary, HSBC Bank, had incorrectly flagged 99 per cent of eligible deposits as ineligible for an FSCS payout. It also provided insufficient proof that its systems met certain requirements of the deposit protection rules, the financial stability watchdog said.
The £57.4 million HSBC fine indicated the “seriousness” of its failings, the PRA said, as it was the second-largest fine ever imposed by the Bank of England, outstripped only by the PRA’s £87 million (€101.8 million) sanction slapped on Credit Suisse in 2023.
The regulator nevertheless added that that it did not consider the bank’s breaches to be “deliberate or reckless.”
As HSCB had cooperated throughout the investigation, the fine was reduced, the PRA said, revealing that it would otherwise have faced paying a £96.5 million (€112.9 million) penalty.
HSBC later issued a statement, declaring that it was pleased to have resolved the “historic matter.”
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Originally from the UK, Linda is based in Valenca and is a reporter for The Euro Weekly News covering local news. Got a news story you want to share?
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