HSBC Says It Could Start Charging for Current Accounts

The largest bank in Europe, HSBC, could be the first big bank in the UK to start charging its customers for their current accounts.

The bank is scrambling to make up for lost earnings during the pandemic due to low interest rates. HSBC’s share price has fallen almost 40% since February.

Noel Quinn, HSBC’s chief executive, said the bank was not planning to introduce fees on basic accounts. However, those with standard bank accounts with overdraft facilities may start being charged.

“We will look in all our markets at the appropriate pricing strategy for fees and lending by customer segment to make sure we have a sustainable profitable business going forward,” Quinn said.

The move would be a controversial one, as most banks in the UK don’t charge customers for current accounts.

However, in other countries where customers are accustomed to paying for banking services, such as the US, France, and Canada, HSBC already charges most of its customers.

Quinn said that interest rates being slashed in the UK to record lows at the start of the pandemic has led the bank to review its fees.

The low interest rates has had a significant impact on how much the bank can earn from interest on mortgages and loans.

“What we’ve got to do as an institution is look at ways that we can continue to grow our revenue in a low interest rate environment,” said Quinn.

Consumer group Which? has warned the bank that charging for accounts would be a ‘huge and risky move’ as customers could just switch over to another bank.

Head of money at Which?, Gareth Shaw, said: “The danger for consumers is that if one of the big banks opens the door to charging fees, the others may follow suit – but competition for customers would hopefully dictate that there will be a range of attractive free accounts available for the foreseeable future.”

Back in August, HSBC announced that it would cut around 35,000 jobs worldwide. The bank has now revealed that it will implement further cost-cutting measures: “We expect to reduce the group’s 2022 annual cost base beyond our original $31bn [£24bn] target, while sustaining investment in our focus areas.”

The bank has already slashed 6,300 jobs so far this year and predicts that it will have laid-off 10,000 people by the end of 2020.