HSBC apologises after causing panic among customers in Hong Kong

HSBC apologised to customers in Hong Kong after an update to its online and mobile banking terms stoked fears over overseas access to its services in the financial hub.

The quick mea culpa by Hong Kong’s biggest bank — triggered by a Twitter post — underscores growing concerns in the city over not only civil society but also pressures on businesses as China tightens its grip.

Banks are trying to navigate an increasingly fraught political environment. The government last week used them as a hammer to shutter the city’s premier pro-democracy newspaper, Apple Daily, ordering seven lenders against dealing with the company. The banks haven’t been identified. Access to funds in the city is becoming a sensitive topic with thousands of Hong Kongers leaving for the UK and other places as freedoms are restricted.

Against that backdrop, the city’s residents were spooked after a Twitter post on Tuesday shared a link to updated online and mobile banking terms on HSBC’s website. The bank announced changes to its terms from July 26. It said customers may not be able to use online or mobile banking outside of Hong Kong.

The incident was widely reported by major local newspapers, including Ming Pao, Sing Tao Daily and Hong Kong Economic Times. On LIHKG, one of Hong Kong’s largest online forums, a post on HSBC has more than 800 comments since late Tuesday, with some people saying they would transfer funds to other banks.

HSBC was quick to reassure customers that there were no changes and that it only had combined terms for its internet banking, mobile app and mobile security key into one document. “HSBC Hong Kong customers can continue to access banking services through online banking and mobile banking outside of Hong Kong SAR,” a spokesperson said. “There is no plan for any amendment of the services. There are similar cross border disclosures in other markets.”

The bank also placed a “special announcement” pop-up on its mobile app, saying there was no plan to change services.

It’s not the first time HSBC has found itself in a hotspot. Late in 2020, it was forced to freeze the account of an exiled former legislator, Ted Hui, after which CEO Noel Quinn was called in to questioning by UK legislators. Quinn, who also reached out to Hui personally to explain, said the bank had no other options than to comply with local regulations.

The lender has also been criticised for publicly endorsing the Beijing-imposed security law and had its branches and main office vandalised during the protests that rocked the city in 2019. Standard Chartered, another big bank operating in the city, also backed the legislation.

“HSBC hasn’t clearly explained why those terms are there, but I believe if Hong Kong customers immigrate overseas, they usually have set up offshore accounts already,” said Ka-chung Law, an economist and adjunct professor at department of economics and finance at City University of Hong Kong. “But if someone has to leave Hong Kong urgently and doesn’t have an offshore account yet, that’ll cause uncertainties and worries.”

Analysts at Bank of America have estimated that emigration-related outflow of money to just the UK could reach HK$280bn ($36bn) in 2021, and HK$588bn over the next five years.

Bloomberg News. More stories like this are available on  bloomberg.com