HSBC plans to eliminate more banking fees in Hong Kong as virtual lenders disrupt troubled industry
- Decision to trim fees follows a move in August last year that forced rivals to respond to protect their customer base
- Five out of eight virtual banks have started operations in Hong Kong despite the pandemic, with incentives to lure deposits away from traditional lenders
The lender will scrap fees on 26 general banking and transaction services to benefit some 4 million account holders in Hong Kong, it said in a statement. It represents a major act after the UK-based lender eliminated the minimum balance fee in August last year.
“Today’s cut reflects our commitment to making sure that everyone has the tools they need to thrive financially,” Greg Hingston, regional head of wealth and personal banking for Asia-Pacific, said in the statement. “We hope it will also help customers who have been hit hard by Covid-19’s economic fallout.”
02:05
HSBC sees second-quarter profits plunge by 82 per cent thanks to coronavirus
“Other big lenders are likely to follow HSBC as they face fierce competition from a wave of virtual banks” to protect their pool of customers and deposits, said Robert Lee, chief executive of local brokerage Grand Capital Holdings.
The fee cut will help repair HSBC’s image, Lee added. The lender suspended its dividend payments from the fourth quarter of last year, which has prompted many local investors to complain.
04:41
HSBC doubles down on Asia in massive staffing overhaul
Effective November 1, HSBC will eliminate 26 tariffs across a broad range of categories, spanning deposit and withdrawal of foreign currency banknotes, requests for banker’s reports and documents, passbook replacement, global fund transfers and remittances.
Some fees will remain, it added, including annual paper statements, penalty for late payment of credit card bills, annual fees for certain credit cards, and commissions related to sale of stocks, insurance and wealth management products.
“It is the right time to cut those fees to help our customers who have been hit hard by the pandemic,” Brian Hui, head of customer propositions and marketing in HSBC’s wealth and personal banking unit, said by phone. “We can attract more new customers while keeping our existing clients happy. This will also help us to cross-sell loans and other financial products.”
Does HSBC need its US business? Bank says yes, some investors call for a break-up
Hui said there was positive feedback from the bank’s decision to remove minimum balance fees in August last year, which resulted in new customer sign-ups.
Along with the fee revamp, the lender will move all its HSBC Advance account holders to a new integrated product called HSBC One from October 27, it said. Other retail accounts, which offer banking and investment services, will also be converted to HSBC One at a later date.
After the change, HSBC One will no longer require people to keep a minimum balance in their account, while HSBC Advance will now require clients to hold at least HK$200,000 in their deposit account or take out a loan of the same amount.
HSBC Premier and HSBC Jade accounts – which are for the more wealthy retail customers – and other simple retail accounts will not be affected.