HSBC fears it may have to pay back £300m in overdraft fees

[Legal Beagles]

Bank believes that if a test case goes against the industry it could face claims of £300m

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[TUTTSI]

Re: HSBC fears it may have to pay back £300m in overdraft fees

Well, well, well how the almighty bank is worried - I do hope that their fears become a reality very soon and that they will have to repay all those bank charges. They made very nice profits and those at the top are getting great salaries - so whats their problem.
DSxx

[Amethyst]

Re: HSBC fears it may have to pay back £300m in overdraft fees

HSBC yesterday said it may have to pay £300m to customers reclaiming overdraft fees as it reported record profits of £12.1bn despite the "exceptionally weak performance" of its US business.
Britain's biggest bank last year paid £115m to customers who were charged overdraft fees and believes that if a test case goes against the industry it could face further claims of £300m. This is the first estimate given by a high street bank about the potential impact of the case brought by the Office of Fair Trading, which according to some estimates could cost the industry £10bn.
HSBC reported a 10% rise in profit despite a record $17bn (£8.5bn) charge to cover bad loans. The bulk of this was caused by problems in the US, where impairment charges and other risk provisions rose by 79% to $11.7bn. This almost wiped out the contribution from the North American division, which crashed from $4.6bn in 2006 to $91m last year.
HSBC shares were the largest gainers in the FTSE 100 yesterday, up 24p at 790p.
The bank said that the outlook for 2008 was "uncertain" and that it was looking for ways to redeploy capital from developed markets to developing ones. It is already in talks to sell 400 branches in France to Banque Fédérale des Banques Populaires. But, responding to demands from activist investors Knight Vinke to sell off the US arm, Stephen Green, the chairman, said this would be "unthinkable and irresponsible".
The bank admitted, though, that its Beneficial Bank operations in Britain were being scaled back. "We are looking at many options for that business longer term," said Dyfrig John, head of HSBC's European operations.
John said the retail bank in the UK, which reported a 16% fall in pre-tax profit to £740m, would increase its share of the mortgage market through HSBC branches and its First Direct telephone operations. UK profits were held back by the overdraft charges and a £85m charge for mispricing in its trust operations over 40 years.
The economic slowdown and the credit outlook in the US "may well get worse before they get better", the bank said as it admitted the global banking and markets operation had written down $2.1bn on instruments affected by the sub-prime mortgage crisis. This arm still reported $6bn of profits and the bank appointed its head, Stuart Gulliver, to the board.
Gulliver is one three new executives appointed to a board that is dominated by non-executives, much to the consternation of shareholders. Three non-executive directors - Baroness Dunn, Sir Brian Moffatt and Lord Butler - are leaving and Safra Catz and Narayana Murthy will join in May.
Knight Vinke said the board changes "have gone a long way to addressing our concerns". But it kept up its pressure on the bank, criticising its US arm, which it said was "structurally unable to support the $150bn of debt on its balance sheet".
For the first time, the bank issued measures to judge its performance based on financial performance, customer retention and employee engagement. It is aiming for a return on equity of 15-19%, a cost-efficiency ratio of 48-52% and it also set goals for regulatory capital and total shareholder returns.
The bank was helped to its record pre-tax profits by its tax charge, which was cut to 15% from 24% a year ago.
The fourth interim dividend will be 39 cents, taking the total dividend to 90 cents, a rise of 11%.
Incentives: Bank bows on bonuses

HSBC yesterday said it "regrets if there has been any misunderstanding" caused by its long-term incentive schemes. The bank also intends to make changes to the deal after fierce criticism last year from Knight Vinke.
Five unnamed executives earned more than £3.7m last year - new director Stuart Gulliver, right, may be one of them. One received £9.9m-£10m.
Mike Geoghegan, the chief executive, received £3.5m in salary and bonuses compared with £2.8m a year ago. He also made £414,000 on share awards that vested during the year and was awarded £5m of shares that could vest in 2010. The chairman, Stephen Green, received £3m and made £1m from shares vesting. In future, he will not receive a cash bonus but be paid in shares instead.
Under the proposed changes, Geoghegan and finance director Douglas Flint could receive bonuses worth 400% of their salary compared with 250% now. Executives will be required to invest four to five times their salary in the bank's shares.

[Amethyst]

Re: HSBC fears it may have to pay back £300m in overdraft fees

Who said that ? It wasn't in their accounts. They haven't attributed the comments to anyone specific.

[Guest]

Re: HSBC fears it may have to pay back £300m in overdraft fees

Well, well, well how the almighty bank is worried - I do hope that their fears become a reality very soon and that they will have to repay all those bank charges. They made very nice profits and those at the top are getting great salaries - so whats their problem.
DSxx

It equates to less than nine days profit. They will hardly feel it.

No company likes to lose money of course but the truth is, they are not worried and this story is seeded in order to attempt to give the bank a "caring" image. They do not care and they never have.

It is difficult to understand such large numbers and understanding just one billion is hard, let alone over twelve billion.

If you could spend £1000 per day, every day it would take you over three thousand years to spend £1 Billion pounds.

One billion seconds ago it was 1976.

One billion £1 coins stacked on top of each other would be 1,957.3 miles high and laid on their sides, they would stretch between Land's End and John O'Groats and back again, with several hundred thousand pounds to spare.

[Amethyst]

Re: HSBC fears it may have to pay back £300m in overdraft fees

Its a lot of money then

[Amethyst]

Re: HSBC fears it may have to pay back £300m in overdraft fees

HSBC preparing for the inevitable - Legal Beagles

answers my earlier question

[edna mode]

Re: HSBC fears it may have to pay back £300m in overdraft fees

any update on this please

[MIKE770]

Re: HSBC fears it may have to pay back £300m in overdraft fees

any update on this please

OFT Lost this is a very old case, BUT if you can prove hardship/.BCOBS may well be of use against them.

[edna mode]

Re: HSBC fears it may have to pay back £300m in overdraft fees

thks