HSBC fined £57.4m by the Bank of England for ‘serious failings’ to protect customer deposits.
The bank failed to accurately identify deposits eligible for the UK’s Financial Services Compensation Scheme, the Bank’s Prudential Regulation Authority (PRA) announced.
HSBC was fined by the Bank of England’s Prudential Regulation Authority (PRA) for failing to properly implement the depositor protection rules, which are meant to safeguard customer deposits in case of a bank collapse.
Serious concerns
The PRA said the failings were ‘serious‘ and ‘materially undermined the firm’s readiness for resolution’. HSBC reportedly said it was pleased to have resolved the ‘historic matter’ and cooperated with the investigation. The ‘failings’ occurred between 2015 and 2022. The fine is the second highest to date imposed by the regulator.
Protected up to £85,000 per person per institution
Under the scheme, customer deposits are protected up to the value of £85,000.
Under depositor protection rules, banks must have systems and controls in place to make sure that financial information is logged correctly. This information is needed if the FSCS has to make payments to customers upon a bank collapse.
However, the PRA said HSBC Bank incorrectly marked 99% of its eligible beneficiary deposits as ‘ineligible’ for FSCS protection.
Unfortunately this episode doesn’t give me much faith in the banking system that is supposed to protect the ‘saver’. At least the PRA discovered the failings.