HSBC Bank (Europe)
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HSBC UK Bank plc is a British multinational banking and financial services organisation based in
Birmingham Birmingham ( ) is a city and metropolitan borough in the metropolitan county of West Midlands in England. It is the second-largest city in the United Kingdom with a population of 1.145 million in the city proper, 2.92 million in the West ...
, England. It is part of
HSBC Holdings HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tril ...
. HSBC UK Bank plc is one of the four major clearing banks in the United Kingdom and is a wholly owned subsidiary of HSBC Holdings. The business ranges from the traditional
high street High Street is a common street name for the primary business street of a city, town, or village, especially in the United Kingdom and Commonwealth. It implies that it is the focal point for business, especially shopping. It is also a metonym fo ...
roles of
personal finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...
and
commercial banking A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with co ...
, to
private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
,
consumer finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...
as well as
corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and re ...
and
investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
. Across all brands the bank operates some 1800 sites in the UK. The UK headquarters of HSBC is located at
One Centenary Square One Centenary Square (formerly Two Arena Central), is a , eleven storey building between Alpha Tower and the former Birmingham Municipal Bank headquarters on Broad Street in Birmingham, England. The building serves HSBC Bank as their UK headqua ...
in Birmingham. HSBC UK Bank plc is the only one of Britain's big five banks to hold more deposits than loans (loan:deposit ratio of 90%). This has led to the bank being seen as a less risky proposition than the other banks by investors and customers, as it is able to fully fund its own operations. This also contributed to the company's share price maintaining value throughout the credit crunch, unlike other banks in the market.


Acquisition of Midland Bank

The Hongkong and Shanghai Banking Corporation The Hongkong and Shanghai Banking Corporation Limited (), commonly known as HSBC (), was the parent entity of the multinational HSBC banking group until 1991, and is now its Hong Kong-based Asia-Pacific subsidiary. The largest bank in Hong K ...
acquired a 14.9 per cent equity interest in Midland Bank plc in 1987, and a strong working relationship developed. In 1992, HSBC Holdings plc acquired full ownership of Midland Bank. It was one of the largest acquisitions in banking history, giving HSBC the major foothold in Europe that it needed to complement its existing business in Asia and the Americas. Midland Bank was renamed HSBC Bank plc in 1999 as part of the adoption of the HSBC brand throughout the Group.


UK banking

Through its sister company HSBC UK Bank plc (also a wholly owned subsidiary of HSBC Holdings plc), the bank maintains a network of 594 branches throughout
England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...
and
Wales Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
, with a much smaller presence in
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
and
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
where local banks tend to dominate. In recent years, branches have undergone a programme of rolling refurbishment, with a focus on open-plan areas, increased self-service 'Express Banking' machines, ATMs, and an improved layout. Branches also feature HSBC Live, a radio station specifically produced for the bank by media company Immedia in
Newbury, Berkshire Newbury is a market town in the county of Berkshire, England, and is home to the administrative headquarters of West Berkshire Council. The town centre around its large market square retains a rare medieval Cloth Hall, an adjoining half timbere ...
. In mid-2003, HSBC became the first UK high-street lender to offer homebuying products in compliance with
Sharia Sharia (; ar, شريعة, sharīʿa ) is a body of religious law that forms a part of the Islamic tradition. It is derived from the religious precepts of Islam and is based on the sacred scriptures of Islam, particularly the Quran and the H ...
(Islamic) law, which prohibits the charging or payment of interest. The range now includes a bank account, home insurance policy (
takaful Takaful ( ar, التكافل, sometimes translated as "solidarity" or mutual guarantee) Khan, ''What Is Wrong with Islamic Economics?'', 2013: p.403 is a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic ...
), and home finance. In April 2008, HSBC launched a campaign selling mortgages. This was seen as a risky move by media and HSBC staff due to their previous non-plus attitude building on their 3% market share of the mortgage market. While other banks and building societies felt the effects of the 'credit crunch', HSBC, bolstered by a favourable savings to lending ratio, unveiled a mortgage rate matching deal that would offer non-HSBC mortgage customers the ability to match their current mortgage rate. In 2009, the bank closed its outlets in
Morrisons Wm Morrison Supermarkets, trading as Morrisons, is the fifth largest supermarket chain in the United Kingdom. As of 2021, the company had 497 supermarkets across England, Wales and Scotland, as well as one in Gibraltar. The company is headqua ...
supermarkets which had traded under the ''Your bank at Morrisons'' brand following the end of an agreement between both businesses. The outlets offered a range of financial services, including an exclusive credit card and
savings account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transac ...
. In March 2015, the bank announced its intention to move its UK retail banking headquarters from London to Birmingham (
One Centenary Square One Centenary Square (formerly Two Arena Central), is a , eleven storey building between Alpha Tower and the former Birmingham Municipal Bank headquarters on Broad Street in Birmingham, England. The building serves HSBC Bank as their UK headqua ...
) in 2018 as part of the programme of ring-fencing overseen by the Prudential Regulation Authority. The programme saw the bank segregate 250 IT systems, change sort code details for approximately 400,000 accounts, and transfer almost 14.5m customers to the new UK arm. The bank also announced it would brand the new arm, including all of its branches, as HSBC UK. It had previously been speculated that HSBC might revive the
Midland Bank Midland Bank Plc was one of the Big Four banking groups in the United Kingdom for most of the 20th century. It is now part of HSBC. The bank was founded as the Birmingham and Midland Bank in Union Street, Birmingham, England in August 1836. It ...
name or use the
first direct First Direct (styled first direct) is a telephone and internet based retail bank division of HSBC Bank plc based in the United Kingdom. First Direct has headquarters in Leeds, England, and has 1.45 million customers. It was awarded Most T ...
brand for its branch network. As part of setting up the new bank, a new board and legal structure was created. In November 2016,
Clara Furse Dame Clara Hedwig Frances Furse Order of the British Empire, DBE () (born 16 September 1957) was the Chief Executive of the London Stock Exchange between January 2001 and May 2009, and was the first woman to occupy the position. In 2005, she was ...
was named as the first Chairwoman of HSBC UK Bank plc.


Other UK operations


first direct

In 1989, the Midland Bank launched
First Direct First Direct (styled first direct) is a telephone and internet based retail bank division of HSBC Bank plc based in the United Kingdom. First Direct has headquarters in Leeds, England, and has 1.45 million customers. It was awarded Most T ...
, the pioneer of
telephone banking Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform over the telephone a range of financial transactions which do not involve cash or Financial instruments (such as cheques), without ...
, with a person-to-person service available 24 hours a day, 365 days a year. It continues to operate as a
division Division or divider may refer to: Mathematics *Division (mathematics), the inverse of multiplication *Division algorithm, a method for computing the result of mathematical division Military *Division (military), a formation typically consisting ...
of HSBC UK. It now offers
internet banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...
as well and serves more than one million customers. By 2004, First Direct had established a position as the United Kingdom's most recommended bank. As of 2020, results of surveys commissioned by the
Competition and Markets Authority The Competition and Markets Authority (CMA) is the competition regulator in United Kingdom. It is a non-ministerial government department in the United Kingdom, responsible for strengthening business competition and preventing and reducing anti-com ...
showed it continued to be the most recommended UK bank.


HFC Bank

Household International HSBC Finance Corporation is a financial services company and a subsidiary of HSBC Holdings. It is the sixth-largest issuer of MasterCard and Visa credit cards in the United States. HSBC Finance Corporation was formed from the legal entity that ...
established HFC Bank as consumer finance business in the UK in 1973, it became one of the largest consumer finance companies in the UK before Household was acquired by HSBC in 2003. HFC Bank provides retail credit to many leading national retailers and is the largest point of sale loan provider in the UK. The business focuses on retail finance through branches and direct channels, and co-branded and loyalty credit cards. Some of the key brands are the recently relaunched Beneficial Finance (with around 160 branches) and marbles. HFC Bank has around 3.5 million customers.


Other brands

As a result of the Household acquisition, the UK group gained expertise allowing it to enter joint ventures and contracts with more high street names, such as taking over
Marks and Spencer Marks and Spencer Group plc (commonly abbreviated to M&S and colloquially known as Marks's or Marks & Sparks) is a major British multinational retailer with headquarters in Paddington, London that specialises in selling clothing, beauty, home ...
's financial division, now M&S Bank, on a partnership basis in 2004 and the
John Lewis Partnership The John Lewis Partnership plc (JLP) is a British company which operates John Lewis & Partners department stores, Waitrose & Partners supermarkets, its banking and financial services, and other retail-related activities. The privately-held publ ...
Card contract.


Controversy


Withdrawal of graduate overdrafts

In July 2007, HSBC suddenly withdrew its interest-free overdrafts for graduates. Students graduating that year discovered that they were to face unexpected bills of up to £140 a year. Students mobilised protests using the social networking website Facebook and in August, HSBC reversed their policy, freezing overdraft charges to recent graduates and pledging to repay charges deducted in August while holding talks with the National Union of Students.


Data loss

In April 2008, HSBC confirmed the loss of unencrypted data disks containing life insurance policy details for 370,000 customers. In February 2011 HSBC sent a letter dated 11 February to an unknown number of recipients, stating that they were "writing to inform you of the potential compromise of some of your former account information with us." The date and extent of the loss were not given; however, HSBC offered a year's enrolment to ITAC Sentinel and advised vigilance for 12 to 24 months, as well as recommending contacting the three major credit bureaus to place a fraud alert on the credit profile.


Cultural insensitivity

In 2008, HSBC were accused of 'cultural insensitivity' in an advertising campaign featuring an overweight white man dressed to look like a
Sumo is a form of competitive full-contact wrestling where a ''rikishi'' (wrestler) attempts to force his opponent out of a circular ring (''dohyō'') or into touching the ground with any body part other than the soles of his feet (usually by thr ...
wrestler. The campaign upset members of Britain's Japanese community who claimed the man's skin tone was darkened and makeup was applied to narrow his eyes. HSBC denied making the model appear to be from a specific country or region but admitted makeup was applied and skin tone was tanned.


Links to arms dealership

In December 2008, the British anti-poverty charity War on Want released a report documenting the extent to which HSBC and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that HSBC holds shares in the global
arms industry The arms industry, also known as the arms trade, is a global industry which manufactures and sells weapons and military technology. It consists of a commercial industry involved in the research and development, engineering, production, and servi ...
totalling £450.6 million, and serves as principal banker for
Meggitt Parker Meggitt (formerly Meggitt plc) is a British international company specialising in components and sub-systems for the aerospace, defence and selected energy markets. It was listed on the London Stock Exchange and was a constituent of the ...
, one of the UK's largest arms companies. The report also details HSBC's dealings with known producers of
cluster munitions A cluster munition is a form of air-dropped or ground-launched explosive weapon that releases or ejects smaller submunitions. Commonly, this is a cluster bomb that ejects explosive bomblets that are designed to kill personnel and destroy vehicl ...
and depleted uranium munitions.


Money laundering for drug cartels

In 2012, the U.S. government uncovered a "blatant failure to implement proper anti-money laundering controls facilitating the laundering of at least $881 million in drug proceeds through the U.S. financial system". The bank also violated US sanctions by conducting business in countries on US blacklists, including Iran, Libya, and Cuba. The bank paid a $1.9 billion fine and entered into a 5-year
Deferred Prosecution Agreement A deferred prosecution agreement (DPA), which is very similar to a non-prosecution agreement (NPA), is a voluntary alternative to adjudication in which a prosecutor agrees to grant amnesty in exchange for the defendant agreeing to fulfill certain ...
with the US Department of Justice. A US Congressional report revealed that the UK government had intervened in the investigation to warn against prosecution, advising that it would have "very serious implications for financial and economic stability", and that the US Attorney General decided not to prosecute the bank as a result of its "systemic importance" to the global financial system.


Closure of Islamic accounts

In 2014, HSBC closed
North London Central Mosque The Finsbury Park Mosque, also known as the North London Central Mosque, is a five-storey mosque located next to Finsbury Park station close to Arsenal Football Club's Emirates Stadium, in the London Borough of Islington. Finsbury Park Mosque ...
's account and some
Muslim Muslims ( ar, المسلمون, , ) are people who adhere to Islam, a monotheistic religion belonging to the Abrahamic tradition. They consider the Quran, the foundational religious text of Islam, to be the verbatim word of the God of Abrah ...
clients' and groups' accounts. Several sources reported that HSBC closed them because they donated their money to
Palestine __NOTOC__ Palestine may refer to: * State of Palestine, a state in Western Asia * Palestine (region), a geographic region in Western Asia * Palestinian territories, territories occupied by Israel since 1967, namely the West Bank (including East ...
during the recent conflict. The bank claimed that continuing to provide bank accounts would be outside of their "risk appetite" and said the decisions were "absolutely not based on race or religion" but declined to comment on individual cases.


Mass Job Cuts

In February 2020, HSBC announced their plan to lay off more than 35,000 jobs worldwide as their profits for 2019 fell 33%. The company’s interim chief executive, Noel Quinn, announced that the company was planning to scale back its headcount from 235,000 to around 200,000 by 2023. This 35,000 job losses represented about 15% of the company’s workforce.


Relationship with China

In June 2020, HSBC ended a year-long policy of refusing to comment on the
protests in Hong Kong A protest (also called a demonstration, remonstration or remonstrance) is a public expression of objection, disapproval or dissent towards an idea or action, typically a political one. Protests can be thought of as acts of coopera ...
. Protests had been ongoing over the increasing control that
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
had been attempting to assert over
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
, through the imposition of new
national security National security, or national defence, is the security and defence of a sovereign state, including its citizens, economy, and institutions, which is regarded as a duty of government. Originally conceived as protection against military atta ...
laws. In a statement, HSBC said that it "''respects and supports all laws that stabilise Hong Kong's social order’''". The move was widely seen as backing China in the dispute, and was criticized by the
United States Secretary of State The United States secretary of state is a member of the executive branch of the federal government of the United States and the head of the U.S. Department of State. The office holder is one of the highest ranking members of the president's Ca ...
Mike Pompeo Michael Richard Pompeo (; born December 30, 1963) is an American politician, diplomat, and businessman who served under President Donald Trump as director of the Central Intelligence Agency (CIA) from 2017 to 2018 and as the 70th United State ...
, calling the bank's policy a "corporate kowtow". The move was also commented on by
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
Leader of the House of Commons The leader of the House of Commons is a minister of the Crown of the Government of the United Kingdom whose main role is organising government business in the House of Commons. The leader is generally a member or attendee of the cabinet of the ...
Jacob Rees-Mogg Jacob William Rees-Mogg (born 24 May 1969) is a British politician serving as the Member of Parliament (MP) for North East Somerset since 2010. Now a backbencher, he served as Leader of the House of Commons and Lord President of the Council ...
, saying that HSBC may be more closely "aligned with the Chinese government than Her Majesty’s Government”.


UK Money laundering fine

In December 2021, the
Financial Conduct Authority The Financial Conduct Authority (FCA) is a financial regulation, financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The ...
fined HSBC Bank plc £63.9m for "unacceptable failings" relating to its UK anti-money laundering operations. The FCA said that HSBC's transactional monitoring systems "showed serious weaknesses over a period of eight years from 31 March 2010 to 31 March 2018." HSBC did not dispute the findings, resulting in the fine being reduced from £91m.


See also

*
HSBC Bank International HSBC Expat, formerly HSBC International, is the offshore banking arm of the HSBC Group and is wholly owned by HSBC Holdings plc HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the lar ...
* Midland Bank plc


References


External links


HSBC GroupHSBC Bank UKHSBC Private BankHSBC Bank International
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