- Nature of service has potential for misuse by criminals: HSBC
- Bank’s spending on regulation, compliance rose 19% in 1Q
HSBC Holdings Plc is strengthening its oversight of its safe-deposit boxes in Hong Kong as the U.K. bank moves to bolster its defenses against financial crimes.
The London-based lender has introduced “several clauses” to the conditions of lease for its safe-deposit lockers, HSBC said in an e-mailed statement Monday. Customers were requested not to deposit any property which could become “a nuisance” or of an illegal or “offensive nature,” including explosive, inflammable or liquid items, illegal drugs, weapons, guns and stolen property.
The statement didn’t provide details on how the bank would police the new rules, or any penalties for box holders who broke them. The South China Morning Post reported the tighter oversight earlier on Monday, citing a letter sent by the bank to clients last month.
“The nature of a safe-deposit locker service means it has the potential for misuse for criminal purposes,” the bank said. The new clauses will “further strengthen our defenses against financial crime” and to enable HSBC to co-operate with law-enforcement agencies when required, it said.
Europe’s biggest bank is among global financial firms that have been grappling with investigations into money laundering and tax evasion around the world. The bank’s total expenditure on regulatory programs and compliance rose 19 percent in the first quarter to $700 million, according to the earnings statement HSBC released earlier this month.