HSBC faces £57mln penalty for depositor protection violations

The Bank of England’s Prudential Regulation Authority (PRA) imposed a fine of £57.4 million ($73 million) on HSBC Bank, according to a statement published on Tuesday.

This fine is for their long-standing failures to meet the Depositor Protection Rules, including not correctly identifying deposits eligible for the Financial Services Compensation Scheme (FSCS).

The PRA said that the fine, which is its second highest ever, reflects the severity of these failings.

Sam Woods, the Deputy Governor of the Bank of England and CEO of the PRA, emphasised the importance of banks fully complying with the PRA’s safety and soundness objective, stating that the significant failings in this case highlight the critical need for all banks to be fully prepared for resolution.

One HSBC unit incorrectly classified 99 per cent of eligible beneficiary deposits as ineligible, a mistake the Bank of England deemed would have significantly hindered regulatory efforts to resolve it.

In recognition of HSBC’s co-operation with the investigation, the PRA lowered the bank’s fine from £96.5 million to £57 million, according to the regulator.