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HSBC fined £57.4 million for "serious failings" in depositor protection

HSBC has been hit with a £57.4 million fine by the Prudential Regulatory Authority for failing to accurately log accounts eligible for compensation under the Financial Services Compensation Scheme.

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HSBC fined £57.4 million for "serious failings" in depositor protection

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The blunder, which ran from between 2015 to 2022, meant that up to 99% of acounts eligible for up to £85,000 in compensation in the event of the bank's failure, were incorrectly markeded as ineligible for FSCS protection.

In its submission, the PRA says that the bank provided incorrect evidence that its systems satisfied certain requirements of the deposit protection rules.

The depositor protection failings were found to be so significant the PRA said it had "materially undermined" HSBC's readiness for a restructuring.

The fine is the second highest ever levied by the regulator. Because it co-operated with the investigation and accepted that it had broken the rules, the bank qualified for a 15% reuction in the pentalty, while agreement to resolve the issue qualified for a further 30% reduction.

PRA chief executive Sam Woods says: "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," he said, adding the lender had fallen "far short of its obligations in this area, and failed to disclose its failings to us in a timely manner".

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