HSBC fined £57 million by UK watchdog for mismarked deposits

HSBC Holdings Plc received a £57.4 million fine from the UK for improperly excluding billions of pounds from a depositor protection scheme, marking the Prudential Regulation Authority's second-highest penalty. \r

The authority cited failures in complying with deposit protection rules from 2015 to 2022. The bank inaccurately identified deposits eligible for Financial Services Compensation Scheme (FSCS) protection.\r

Despite being the second-largest PRA fine, it pales in comparison to US fines. The errors stemmed from confusion over UK ring-fencing rules implementation, resulting in £4.5 billion of deposits being misclassified and £2 billion wrongly excluded. \r

HSBC's delay in notifying the PRA about the issue was criticized. The original fine was £96.5 million but was reduced due to HSBC's cooperation and admission of breaches.