HSBC anger over 'interference'

BRITAIN'S biggest bank, HSBC, has launched a blistering attack on the Government for interference in the financial services industry. The group said it has spent more than £100m of shareholders' money in the past three years administering and implementing Government-inspired reviews and regulations.

HSBC also predicted it would spend up to £40m in the second half of this year complying with the conclusions of the Competition Commission's inquiry into small businesses, which recommended that banks offer interest on current accounts.

'The cumulative effect of the various regulatory measures we are seeing in the UK is not actually in the best interests of our shareholders, our customers, the financial services industry or, perhaps, the public at large,' said chairman Sir John Bond at HSBC's annual meeting. 'It is our sincere hope that further changes in the regulatory environment will not reduce the competitiveness of the industry.'

Bond sought to underline his point by showing how many reviews had been undertaken in recent years. He cited the Cruickshank review of the banking sector, the launch of the universal bank Paycom, the DeAnne Julius review of banking consumer codes, the Sandler review of long-term saving and life assurance, the Department of Trade and Industry Debt Taskforce, the Office of Fair Trading inquiry into Mastercard services to merchants, reviews of ATM charges and CAT standards. 'Much of this work was necessary and we supported it. But some of it was not,' said Bond.

He suggested the cost will have to be borne by 190,000 investors who own shares directly in HSBC and 17m British savers who have an interest in the bank's performance thanks to pension or saving products.

On current trading, Bond said conditions in Argentina remain critical. Last year, the bank made a $1.1bn (£751m) provision against the country and future options are assessed daily.

Bond stressed the group's commitment to its investment banking division, despite recent high-profile defections. 'Our aim is not to position ourselves as a bulge-bracket investment bank but rather to have a substantial investment bank tailored to HSBC's needs' he said. Consumer spending remains buoyant but demand for corporate credit continues to be muted.