Thursday 7 November 2019 4:43 pm

HSBC receives second Bank of England warning over ‘non-financial risks’

HSBC has received a second warning from the Bank of England over its lack of progress tackling so-called non-financial risks, according to people familiar with the matter.

Read more: ‘Not acceptable’: Profit sinks at HSBC

Samir Assaf, chief of global banking and markets at the lender, told other executives on a call this week that the BoE’s Prudential Regulation Authority (PRA) had given HSBC another ticking off.

The PRA’s warning does not involve any risk to credit or the bank’s financial position. Non-financial risks cover issues such as financial crime, staff misconduct and culture, and compliance breaches.

Assaf is set to convene a summit of HSBC’s top brass to try to thrash out a solution to the problem, Bloomberg reported.

The multinational investment bank is currently undertaking a major turnaround, with reports emerging last month that as many as 10,000 jobs could be cut.

HSBC’s ex-chief executive John Flint was ousted last year, leading to his efforts to improve the culture of the bank to be put on the backburner. The new CEO Noel Quinn has focused on cost-cutting.

Both HSBC and the Bank of England declined to comment.

A private survey from earlier this year said HSBC came bottom out of a list of seven top investment banks when staff were asked about issues such as “flexing ethical standards to make career progression,” according to documents seen by Bloomberg.

Read more: HSBC reportedly mulling up to 10,000 job cuts

Last month, HSBC called parts of its performance “not acceptable” as it revealed an 18 per cent drop in third quarter profit. The lender’s poor results were fuelled by weakness in its European and US divisions.

(Image credit: Getty)