HSBC has set aside £1.2bn to pay redress to UK customers, including £89.5m for unsuitable investment advice.
In its annual results, published today, the bank revealed it had set aside a total of £1.2bn for UK customer redress. As well as the provision for advice given through its wealth management arm, the bank has set aside £454m for missold payment protection insurance and £156.8m for missold interest rate swaps. HSBC made a provision of £1.4bn for UK customer redress in 2012.
The bank’s European division, including the UK, posted a £1.1bn profit, up from the £2.3bn loss made in 2012.
UK mortgage lending fell 12 per cent from £16.4bn to £14.4bn. First-time buyer lending fell 24 per cent from £5bn to £3.8bn.
The average loan-to-value on new lending was 59.5 per cent, compared to 48.3 per cent on HSBC’s total mortgae book.
Overall the bank reported a pre-tax profit of £13.56bn for 2013, a nine per cent increase on 2012’s £12.41bn. Total group revenue totalled £38.84bn in 2013, down from £41.05bn in 2012.
HSBC Group chief executive Stuart Gulliver says: “Our performance in 2013 was influenced by the strategic measures that we have taken since the start of 2011.
“Although much progress has been made since 2011, we did not meet all of our targets by the end of 2013. Our reported cost efficiency ratio of 59.6 per cent and return on equity of 9.2 per cent in 2013 were both outside our target ranges, in part affected by continuing UK customer redress. In addition, there is further work required to grow our incremental wealth revenues to achieve our target of £1.8bn in the medium term.”