Nathalie Thomas: HSBC claimed not to be a villain like the other banks – but, oh yes it is

PANTO villains come in all shapes and sizes but HSBC has surely just handed theatre directors the most obvious “baddie” of the season: the NHFA banker.

Three years on, memories of the financial crisis may be fading but it doesn’t take much to rile consumers who still feel hard done by as they scrimp and save while bankers have – in the public’s mind anyway – returned to their normal, money-guzzling ways.

Enter stage left HSBC, which until yesterday, had managed to hide behind worse offenders and keep its reputation relatively intact despite also being involved in areas such as US sub-prime mortgages and the mis-selling of payment protection insurance (PPI).

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The plot of this latest scandal is particularly dramatic as it involves elderly customers entering long-term care, who in many cases relied upon the investment recommendations of their friendly independent financial adviser to pay for that care.

HSBC was yesterday slapped by the Financial Services Authority (FSA) with a £10.5 million fine – the biggest ever for a high street bank – after it was discovered that one of its subsidiaries, NHFA, sold savings products between 2005 and 2010 to customers who were likely to see the sun set on their lives before the recommended investment period was up.

Of all of the tales of wrong-doing that have emerged from the banking sector over the past couple of years, there’s something particularly distasteful about the idea of people who were vulnerable and close to death being misinformed.

What’s worse is they were given “inappropriate” advice by the market leader and NHFA dominated 60 per cent of the market for financial advice on long-term care products.

HSBC has, of course, made all of the right, contrite noises about the problems at its subsidiary, which closed for new business in July.

But the episode – which will probably result in a compensation pay-out of £29.5m – will come as a bitter pill to swallow for HSBC group chief executive Stuart Gulliver, who has so far navigated a relatively successful path through other scandals such as PPI and left competitors to take the lion’s share of the flak.

Indeed, in May, when the British Bankers’ Association dropped an appeal in the courts against penalties for PPI mis-selling, Gulliver made a point of distancing HSBC from the rest of the pack, saying: “Our provision is lower than some estimates because we stopped selling PPI in 2007 and other banks carried on into 2010.”

The unprecedented fine is proof that the self-styled “global bank”, which gives the impression of operating on a higher plain than others in the UK market, sometimes plays dirty like the rest of them.

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Gulliver must have been in the mood for kitchen-sinking bad news yesterday though as HSBC also decided to announce that it was axing hundreds of jobs in the UK.

There’s no better way of masking bad news than with more bad news.

Property party time is well and truly over

THE party boys and girls of the Central Belt’s commercial property industry – once notorious for their boozy, high tempo social lives – have very little to celebrate at the moment. There will be a few individuals skulking around with extra long faces, however, after DTZ was sold through a controversial pre-pack administration to Australian firm UGL in the small hours of Sunday night/Monday morning.

Although the company, which had been in the danger zone for a while, can now continue as a going concern, the decision to use a pre-pack has left DTZ shareholders with nothing.

Not only will this have hurt existing Scottish employees of DTZ, which is headed north of the Border by regional chairman Bill Colville, but those with long enough memories will remember that equity partners of Donaldsons received a substantial chunk of their windfall in shares after their firm was sold to DTZ in 2007.

While the most prudent among them would have cashed in those holdings as soon as the terms of the takeover deal allowed, it is believed that many have been left staring at not insignificant holes on their personal balance sheets following the pre-pack.

However, they may be able to take some small crumb of comfort from the fact that every single commercial property consultant operating in the once lucrative Edinburgh and Glasgow markets will be joining the economy aisle at the supermarket as conditions over the next year would appear to be going in only one direction.

Many fear that the industry is in for another wave of large-scale redundancies as property agents heavily out-number the level of deals around.

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The Scottish Property Federation has already warned that this year’s sales figures are likely to reveal a fresh nadir of just £1.6 billion worth of transactions – compared to £6.3bn pre-recession – but the consensus is we ain’t seen nothing yet.