Global banking giant HSBC has reported a huge surge in profits, reaching £5.4bn for the first three months of the year, a 95% increase in profits when compared to a year earlier. The bank has shed tens of thousands of jobs, continued with cost cutting exercises, and witnessed a reduction in bad debts while chief executive Stuart Gulliver said that the industry was heading into “calmer waters” with regards to PPI and other scandals. He also warned, however, that further job cuts were inevitable.
HSBC is one of the world’s largest financial institutions and it has thousands of offices in 85 countries around the world. It is the largest high street bank in the UK and this means that it was also one of the hardest hit during the PPI scandal. The past year has proven difficult for HSBC as they were also hit with hefty fines for money laundering as they offered banking services to countries that were effectively blacklisted by governments.
Stuart Gulliver took over as Group Chief Executive of HSBC at the beginning of 2011 and has come under scrutiny from the press and from bankers especially over the size of his salary and bonuses. The Oxford graduate was paid £7.4m last year and he is one of more than 200 employees around the world that earn more than £1m within the organisation. 78 of these high earning employees were based in the UK and the fact that the bank was being hit with multiple fines over their conduct while still paying extensive bonuses and salaries led to hostility from some quarters.
When it comes to PPI Belfast, claimants have found that they were missold policies in a number of ways. Some lenders sold protected loans, without disclosing the inclusion of PPI Belfast while others persuaded consumers to take policies that were not suitable or appropriate for their circumstances. For example, NHS and Armed Forces employees would have been unable to claim or would have been better off claiming via their employees rather than their PPI policies. These are all cases that are considered mis-selling by regulators.
Consumers that have been mis-sold PPI Belfast have the right to reclaim the money they have paid as well as interest on that amount and, while banks have attempted to have a deadline installed for making claims, there is currently no strict date set for when complaints must have been received.
However, while Mr Gulliver claims that the industry is heading into clearer waters, recent figures from the FCA would seem to contradict his interpretation of the situation. The FCA, which is the new regulatory body that replaced the FSA at the beginning of April this year, noted that PPI complaints rose by 5% in the last half of 2012 when compared to the first half of the year. Even if the increase has slowed, this still represented 2.1m complaints within a six month period regarding the problem. Early signs show similar figures for the beginning of 2013 too.