The Bank of England's Prudential Regulation Authority (PRA) has fined HSBC £57m for failing to properly protect customer deposits in the event of a banking collapse. The penalty is the second-highest ever imposed by the PRA, reflecting the seriousness of the failings, which occurred between 2015 and 2022.
The PRA found that HSBC failed to accurately identify deposits eligible for Financial Services Compensation Scheme (FSCS) protection, which insures deposits up to £85,000 if a bank fails. The bank also lacked adequate systems, controls and governance to enable prompt FSCS payments to depositors in a resolution scenario.
Sam Woods, PRA chief executive, 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.” HSBC also failed to alert the regulator about problems with incorrect marking of accounts for over 15 months.
The fine was reduced from £96.5m due to HSBC’s cooperation and agreement to resolve the matter. The bank said it was “pleased to have resolved this historic matter” and noted its cooperation with the investigation.
