HSBC (United Kingdom)

In 1989, Midland Bank launched First Direct, the pioneer of telephone banking, with a person-to-person service available 24 hours a day, 365 days a year. It continues to operate as a division of HSBC UK. It now offers internet banking 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.[10] As of 2020, results of surveys commissioned by the Competition and Markets Authority showed it continued to be the most recommended UK bank.[11][12]

Household International 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.

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's financial division, now M&S Bank, on a partnership basis in 2004 and the John Lewis Partnership Card contract.

Along with Barclays Bank, HSBC UK Bank plc owns 50% of Vaultex UK Limited, a bulk cash processing company and member of the Bank of England's Note Circulation Scheme,[13] which handles all bulk cash processing for both banks. [14]

On March 13, 2023, after a bidding process, it was announced that HSBC UK had agreed to acquire Silicon Valley Bank UK for £1 in a rescue deal, at no cost to the taxpayer and with depositors fully protected.

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.[15] Students mobilised protests using the social networking website Facebook and in August, HSBC reversed their policy,[16] freezing overdraft charges to recent graduates and pledging to repay charges deducted in August while holding talks with the National Union of Students.

In April 2008, HSBC confirmed the loss of unencrypted data disks containing life insurance policy details for 370,000 customers.[17] 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.

In 2008, HSBC were accused of 'cultural insensitivity' in an advertising campaign featuring an overweight white man dressed to look like a Sumo 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.[18] HSBC denied making the model appear to be from a specific country or region but admitted makeup was applied and skin tone was tanned.[19]

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 totalling £450.6 million, and serves as principal banker for Meggitt, one of the UK's largest arms companies. The report also details HSBC's dealings with known producers of cluster munitions and depleted uranium munitions.[20]

In 2014, HSBC closed North London Central Mosque's account and some Muslim clients' and groups' accounts.[21][22][23][24][25][26] Several sources reported that HSBC closed them because they donated their money to Palestine during the recent conflict.[27][28] 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.[29]

In December 2021, the Financial Conduct Authority fined HSBC Bank plc £63.9m for "unacceptable failings" relating to its UK anti-money laundering operations.[30] 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."[31] HSBC did not dispute the findings, resulting in the fine being reduced from £91m.