HSBC UK Ring Fences Retail Bank
(3 July 2018 - United Kingdom) HSBC has concluded the 'ringfencing' process of its UK high street retail banking division in compliance with UK government legislation.
All UK domiciled authorised deposit taking institutions (ADIs) must have completed the ring-fencing process by the end of 2018 in order to safeguard common customers from the impact of a potential negative economic event such as the Global Financial Crisis (GFC) under the Financial Services Act of 2013. Although Lloyds has not completed its ongoing ringfencing process, RBS’s ringfenced entity took effect from April 30 and Barclays has also already completed the shift.
Each ring fenced retail bank will contain its own board and be governed by independent capital requirements. The reforms were conceived in 2011 by a commission led by Sir John Vickers, and have cost the five majors including Barclays, HSBC, Lloyds, RBS and Santander UK billions of pounds to implement. Ringfencing rules only apply to UK banks that hold more than £25bn in core deposits from individuals and SMEs. HSBC rebranded all its retail branches in the UK to 'HSBC UK’, successfully transferred up to 400,000 customer bank accounts to new sort codes with HSBC UK and headquartered the ring fenced bank in Birmingham, comprising First Direct and M&S Bank units and representing more than £200bn of assets and over 14 million retail and business customers.
"We are delighted to complete the ringfencing of HSBC UK six months ahead of the legal deadline. The creation of our ringfenced bank and our move to Birmingham is a once in a lifetime opportunity to get closer to our customers, colleagues and communities across the UK," stated CEO Ian Stuart.
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