x Abu Dhabi, UAEWednesday 26 July 2017

HSBC ends free international transfers and cuts interest on deposits

HSBC has raised charges for transferring money overseas and has cut interest rates on deposits.

HSBC is to end free transfers for money abroad and cut deposit rates to zero on some accounts.
HSBC is to end free transfers for money abroad and cut deposit rates to zero on some accounts.

HSBC is scrapping free international telegraphic transfers for customers while cutting the interest they earn on deposits.

The move comes just weeks after the Central Bank said it would prevent banks from charging excessive fees.

Customer service representatives said interest on deposits in HSBC "Advance" accounts would be eliminated with effect from April 1. Advance accounts currently pay 0.25 per cent.

A bank spokeswoman said HSBC would end free telegraphic transfers from April 8, adding a fee of Dh50 per transaction.

"We are monitoring banks on this situation," said Saleh al Tenaiji, a senior manager of the Central Bank's banking supervision and examination department.

HSBC's Middle East division last month reported that profit last year almost doubled while impairments were halved. Pre-tax profit from the region rose to US$892 million (Dh3.27 billion) from $455m in 2009.

Last month, the Central Bank announced a move against excessive lending and high service fees.

"Personal consumers started to complain to the Central Bank and we have seen a lot of complaints," Sultan al Suwaidi, the Governor of the Central Bank, said last month.

HSBC's elimination of interest payments on Advance accounts reflected the need for banks to offset Central Bank-imposed fee caps, said Japp Meijer, the senior banking analyst at Alembic HC Securities. "Banks will try to offset lower fees and commissions by beefing up other parts of their business. They are trying to improve margins by increasing a few fees."

* with reporting by Farah Halime

ghunter@thenational.ae

tarnold@thenational.ae