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HSBC sets aside £1.2bn for customer redress

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.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. The figures were outside of the target partly due to continuing UK redress – translate that to ‘ we made huge profits over the previous 10 years because we, and every other bank, were ripping people off by selling them over inflated rubbish products, we have now been found out and are now making the sorts of profits we should have been’.

    When will banks really own up to the TRUE cost of mis-selling? The only reason PPI redress has been so large is due to CMC’s (not us mis-selling, us telling the public it was happening) CMC’s aren’t going to be involved in LIBOR and the government are going to believe the rubbish the banks say and the figures they are quoting are just the tip of the iceberg and they will get away it. If CMC’s were involved you would see this figure quadruple at least.

    Profit at any cost. And a bit like the government, hide it under the carpet when its found out i will be long gone and the new boy can blame it on the predecessor. FSA / FCA ???

  2. Have HSBC ever been through their back books and actually worked out exactly what was mis-sold and what their total liabilities are?

    Or are they just hoping that eventually the fuss will die down and people will forget about their PPI being mis-sold, so they can quietly push it all under the carpet?

  3. Of course HSBC have been through their back books, as has every other bank, and they all know exactly what their liabilities are! They just dont want to admit it. Remember when they said this whole PPI mis-selling issue could get as high as 2 or 3 billion? Lloyds alone are well over that!!!

    Actually, probably closer to the truth is that they really dont know what their true liabilities are because the back office systems for all banks are so appalling! What is worse? they dont know and cant find out or they do know and aren’t going to admit it???

  4. Derek Bradley ceo Panacea Adviser 13th March 2014 at 10:47 am

    The galling thing with HSBC and other banks is that they are still allowed to trade. Any advisory business with such proportionally large and regular outbreaks of miss selling would I suspect be shut down.

    Too big to fail, too big to nail.

    I just love the level playing field of regulation, no wonder consumers lose confidence, this does not help get it back.

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