UK’s PRA fines HSBC £57m for “historic depositor protection failings”

HSBC was fined £57.4 million by the UK’s Prudential Regulation Authority (PRA).
Fine issued to HSBC’s European holding company (HBEU) and UK subsidiary (HBUK) for historic depositor protection failures.
Depositor Protection Rules by the Bank of England were violated, leading to improper implementation over many years.
PRA found HSBC failed to provide information for Financial Services Compensation Scheme (FSCS) reimbursement and misidentified eligible deposits.
Failures occurred between 2015-2022 for HBEU and 2018-2021 for HBUK.
99% of beneficiary deposits were incorrectly marked as ineligible for FSCS protection.
HBEU failed to promptly inform PRA about problems, undermining the firm’s readiness for resolution.
HSBC’s cooperation in the investigation led to a reduced fine of £57.4 million from the original £96.5 million.
Deputy governor for prudential regulation, Sam Woods, emphasizes the importance of banks complying with resolution requirements.
HSBC is “pleased to have resolved” the matter, citing cooperation and efforts to address issues.
Bank of England and PRA introduced revised policies for faster investigations, establishing incentives for early cooperation and admissions.