HSBC fined for failing to protect deposits

HSBC has been fined nearly £60 m for ‘serious failings’ over the way it protected billions of pounds of customers’ money.

The Prudential Regulation Authority (PRA) slapped the banking giant with a £57.4 m penalty.

It was the second biggest fine imposed by the PRA, which is part of the Bank of England.

The regulator said HSBC failed ‘over many years’ to comply with deposit protection rules.

The size of the fine – which was reduced from £96.5 m for cooperation – ‘reflects the seriousness of the failings’ between 2015 and 2022, the watchdog said.

Under the Financial Services Compensation Scheme (FSCS), customer deposits are protected up to the value of £85,000.

Banks and building societies must put in place systems and controls to ensure vital information is logged correctly so the FSCS can make payments to savers in the event of a firm going bust.

Sam Woods, deputy governor for prudential regulation at the Bank of England and chief executive 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.’

He said HSBC ‘fell far short of its obligations in this area and failed to disclose its failings to us in a timely manner’.

But the PRA said it did not believe that HSBC’s breaches were ‘deliberate or reckless’.

HSBC – which has been led by Noel Quinn since March 2020 – said it was ‘pleased to have resolved this historic matter’.

‘The PRA’s final notice recognises the Bank’s co-operation with the investigation, as well as our efforts to fully resolve these issues,’ the bank added.

It paid £1.5 bn in 2012 after an investigation by the US Department of Justice into money laundering by Mexican drug cartels.