HSBC fined £57MILLION by Bank of England over major failings dating back almost a decade
PA
HSBC has been fined £57.4million by The Bank of England’s Prudential Regulation Authority (PRA) for historic depositor protection failings dating back to 2015.
It is the second biggest fine that the watchdog has ever given out.
In a report released by the PRA, it was claimed that the bank did not have "adequate systems and controls, and governance" for making prompt payments in the case of the bank collapsing.
The bank also "failed to be duly open and cooperative with the PRA" as they did not disclose any problems to the watchdog regarding flagging accounts as eligible for deposit protection. This occurred over a 15-month period.
Both HSBC Bank plc (HBEU) and HSBC UK Bank plc (HBUK) have been fined by the watchdog
PAThe Bank of England said HSBC failed to accurately identify deposits that were eligible for Britain's Financial Services Compensation Scheme - which protects customer cash up to 85,000 pounds.
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."
Both HSBC Bank plc (HBEU) and HSBC UK Bank plc (HBUK) have been fined by the watchdog.
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The failings occurred at HBEU between 2015 and 2022, and at HBUK between 2018 and 2021, the regulator said.
The bank said in a statement: "HSBC is pleased to have resolved this matter, which relates to the Bank’s compliance with certain parts of the PRA’s Depositor Protection Rules.
"The PRA’s final notice recognises the Bank’s co-operation with the investigation, as well as our efforts to fully resolve these issues. We continue to remain focused on serving our customers."
Earlier this month, HSBC, alongside First Direct, slashed mortgage rates, however, experts have warned that first-time homebuyers are unlikely to benefit.
The Bank of England said HSBC failed to accurately identify deposits that were eligible Britain's Financial Services Compensation Scheme
PAThe bank’s new deals announced include a five-year fixed remortgage deal of 3.94 per cent for those borrowing up to 60 per cent of the property value.
HSBC UK’s sister bank First Direct launched two products at 3.99 per cent. This includes a 10-year fixed mortgage for people with a 40 per cent deposit, with a rate of 3.99 per cent, reduced by 0.98 percentage points from 4.97 per cent previously.
For those with a 40 per cent deposit, the lender will offer a five-year fixed mortgage priced at 3.99 per cent with both products being available to new and existing customers.
In comparison, HSBC UK has reduced rates on its residential mortgage range by up to one percentage point, with several of its rates being below four per cent for the first time since April 2023.
An HSBC UK spokesperson said: "Our latest changes mean that we are able to offer our existing customers five-year and 10-year fixed-term mortgages that are below four per cent for the first time since April 2023, alongside our lowest rate of 3.89 per cent for existing customers."