MoneyExpert: HSBC Describes End To Free Banking “inevitable” As Profits Soar

HSBC yesterday said that a general move toward annual charges for current accounts and credit cards is “inevitable” in response to a regulatory clampdown on penalty charges.

Chief executive of HSBC Dyfrig John made the announcement as the bank reported first-half profits up by nearly a fifth to £6.7 billion.

“It is clear that we have to look at our relationship with our customers fundamentally,” he said about the Office of Fair Trading’s (OFT) demands that penalty fees be slashed.

“They want more transparency and that means inevitably moving towards a fee-based product. That would mostly likely mean a monthly charge.”

Initial estimates have suggested that the fees could be set around £2 a month, or a single charge of £24 a year.

Basic charges for bank accounts and access to cash through ATMs is already the norm in the US and much of continental Europe.

“Consumers won’t sign a blank cheque on future bank charges,” warned Doug Taylor of consumer rights group Which?

“Consumers will want to be reassured that any changes in charging do not introduce a new level of unfairness or are simply a way of making consumers pay more overall.”

The HSBC statement is the first from a UK bank on a threatened change to the best current account rates if the OFT anti-fees campaign is extended to the sector.

This article: © Moneyexpert Ltd.

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