HSBC accused of ‘making hay’ out of excessive rates of interest after earnings growth

HSBC has been accused of benefiting from greater rates of interest whereas not absolutely passing them on to savers – after its pre-tax earnings this yr greater than doubled to £16.9bn.

The banking large’s outcomes, for the primary six months of 2023, are sharply up on the £6.6bn it reported throughout the identical interval a yr in the past.

Chief govt Noel Quinn mentioned it had been “trying to get the balance right between savings and mortgages” and insisted the financial institution was thoughtful of the monetary pressures a lot of its prospects had been beneath.

More than 80% of HSBC’s earnings had been generated exterior of its UK enterprise, together with in China, Hong Kong, and the Middle East. The financial institution additionally benefited from its takeover of Silicon Valley Bank UK earlier this year.

However, Mr Quinn mentioned the advance in efficiency had been “aided by the interest rate environment”.

The Bank of England has raised interest rates 13 times in a row, most recently to 5% last month because it battles to deliver down inflation. Other international locations, including the US and across Europe have additionally seen price rises this yr.

Critics mentioned HSBC’s earnings growth was the newest instance of a significant financial institution benefiting from rising borrowing prices, together with with mortgages.

Fran Boait, co-executive director of marketing campaign group Positive Money, mentioned: “Make no mistake: the growth in HSBC’s profits is a direct result of the higher interest rates its suffering customers are struggling to pay on their loans.”

She additionally accused the federal government of a “staggering lack of leadership” and mentioned it ought to have acted faster to make banks move greater charges on to savers.

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Watchdog the Financial Conduct Authority (FCA) mentioned on Monday that the majority savers weren’t feeling the total good thing about price rises and announced new measures which will force banks to justify offering low savings rates.

Harriett Baldwin MP, the chair of the Treasury Committee, mentioned: “This morning, we have further evidence that high street banks are making hay out of high-interest rates while still offering little to loyal savers.

“The FCA promised motion yesterday beneath the Consumer Duty and we can be monitoring progress rigorously.

“This isn’t just important to savers, it is important to the whole economy.”

Writing in HSBC’s interim report, Mr Quinn mentioned: “In the UK, we have seen limited signs of stress in the mortgage book, although we are acutely aware of the day-to-day financial challenges that some of our customers face.

“With extra mortgage prospects attributable to roll off fixed-term offers within the subsequent six months, and additional price rises anticipated, more durable occasions are forward.

“We will continue to communicate regularly with our customers, listen to their concerns, seek to offer them help should they want it and ensure they are aware of the range of products available to them.”