HSBC fined £57.4m after ‘serious failings’

The Bank of England has fined HSBC £57.4m, for historic failings over protecting customer’s deposits.

HSBC Bank (HBEU) and HSBC UK Bank (with headquarters at 1 Centenary Square, Birmingham) failed to accurately identified deposits that were eligible for Financial Services Compensation Scheme (FSCS) protection between 2015 and 2022.

FSCS protects customers of financial services firms that have failed and protects deposits of up to £85k.

HBEU failed to inform the PRA of the problems for more than 15 months and marked 99% of its eligible beneficiary deposits as ‘ineligible’ for FSCS protection.

The PRA says its failings were “so significant” that it “materially undermined the firm’s readiness for resolution” if restructuring was needed, but that it doesn’t consider that the breaches were “deliberate or reckless”.

Due to HSBC’s cooperation throughout the investigation and an agreement between both parties to resolve the matter, the bank’s fine was brought down from £96.5m.

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said: “The serious failings in this case go to the heart of the PRA’s safety and soundness objective. It is vital that all banks comply fully with our requirements around preparedness for resolution.

“HBEU fell far short of its obligations in this area, and failed to disclose its failings to us in a timely manner. These failures led to today’s action, including the significant fine.”