HSBC has told dozens of foreign missions in London that it will close their bank accounts, an official said yesterday. The news has sent diplomats across the capital scrambling to find a new place to put their money.
Bernard Silver, an ex-honorary consul who serves as president of the Consular Corps of London, said he'd been told by British officials that more than 40 different embassies, consulates, and high commissions had been affected.
"The majority of missions are finding it very difficult for other banks to accept them," he said.
Silver declined to name any specific missions, but the Mail on Sunday newspaper said that the Papal Nunciature - the Vatican's mission to London - was affected, as was the Papua New Guinea High Commission and the honorary consul from Benin.
The newspaper cited an official at Papua New Guinea's high commission as expressing shock at the move.
"We've been banking with HSBC for 22 years," John Belavu was quoted as saying. "For them to throw us off in this way was a bombshell."
HSBC spokesman Will McSheehy said yesterday that the move was part of a wider reassessment of its business started by chief executive Stuart Gulliver in 2011. As of May, the bank's retrenchment strategy has seen 52 peripheral or underperforming units close and a loss of roughly 40,000 staff.
McSheehy said the changes had translated into a "significantly diminished appetite for the embassy business," although he declined to reveal how many UK missions had their accounts pulled.
Foreign missions traditionally deal in large amounts of cash, something which may have raised uncomfortable questions at a bank that has been buffeted by money-laundering scandals. In 2012 HSBC was slapped with a record fine after US officials revealed that its bankers had been handling assets belonging to Iran, Libya, and Mexico's murderous drug cartels. HSBC is still struggling to clear its name, including in one case revolving around a former employee who claims to have evidence showing "scandalous" levels of tax evasion and money laundering at the company.
McSheehy said that compliance issues were just one of many factors - such as profitability or efficiency - which the bank had assessed.
"There's no one single reason," he said.