HSBC FINED £57.4M – Bank accused of “serious failings” over its requirements to protect customer deposits

HSBC has been fined £57.4m by the Bank of England for “serious failings” over its requirements to protect customer deposits.

The bank failed to accurately identify deposits eligible for Britain’s Financial Services Compensation Scheme, the Bank’s Prudential Regulation Authority (PRA) said.

Under the scheme, customer deposits are protected up to the value of £85,000.

The Bank said the failings occurred between 2015 and 2022.

The fine is the second highest ever applied by the regulator, reflecting the seriousness of the failings, the PRA said.

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 if a bank collapses.

However, the PRA said HSBC Bank incorrectly marked 99% of its eligible beneficiary deposits as “ineligible” for FSCS protection.

HSBC Bank also provided incorrect evidence that its systems satisfied certain requirements of the deposit protection rules, the PRA said.