HSBC Holdings PLC (LSE:HSBA) has been fined £57.4 million (US$73 million) by the Bank of England's regulatory arm for failing to identify customer deposits eligible for protection under Britain's Financial Services Compensation Scheme (FSCS).
The FSCS was established to protect customer deposits of up to £85,000 in the event of an authorised financial services firm’s collapse.
According to a statement from the BoE's Prudential Regulation Authority (PRA), HSBC's failings occurred between 2015 and 2022.
This led to the regulator imposing its second-largest-ever fine.
HSBC failed to be “duly open and cooperative” with the PRA regarding problems identified in the incorrect marking of accounts as eligible for FSCS protection.
The bank also failed to properly allocate senior responsibility for overseeing the regulatory adherence to depositor protection rules.
Commenting on the fine, Sam Woods, chief executive of the PRA stated: “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’s largest fine dates back to 2012, when it agreed to pay US$1.92 billion to settle a multi-year anti-money laundering investigation by US prosecutors.
The bank was accused of failing to enforce rules designed to prevent the laundering of criminal cash, leading to the laundering of cash for drug cartels including the Sinaloa in Mexico and Norte del Valle in Colombia.