Bye Bye HSBC Bank

My application to open an offshore bank account with HSBC has fallen flat on its face.  In order for somebody resident in Russia to open an account on the Isle of Man, they need to have an opening balance of 60,000 Pounds Sterling, which despite my status as cigar-puffing oilman, I do not have.  The reason why they demand such a high opening balance for Russian residents (the normal requirement is 5,000 Pounds Sterling) is because of the risk of “money laundering”.  And that is about as detailed an explanation as I could get.

What is interesting is that HSBC do not advertise this requirement anywhere, it is simply a decision which gets made at the application stage.  Personally, I think the explanation is bollocks.  Anyone wanting to launder money from Russia is probably not going to be doing so in small amounts, and I can’t see how a 60,000 GBP opening balance is going to do anything to discourage such activities.  If anything, putting a maximum balance on the account would be more of a control on money laundering rather than a minimum balance.

I reckon that certain elements within HSBC have no interest in getting involved in private banking in Russia, and really can’t be bothered having to deal with new customers who have set up there.  On the basis of anecdotal evidence, they appear to have enough trouble providing a decent level of customer service to their existing clients who have moved to Russia, and the last thing they want is to have to deal with new clients there as well.  So they come up with a flimsy excuse of “money laundering”, which always sounds good alongside the word “Russia”, to ensure they don’t need to deal with any of it.  Call me cynical, but I strongly suspect that were I to come up with 60,000 GBP tomorrow there would be another reason trumped up as to why the account couldn’t be opened.

So, HSBC is not going to be getting my custom.  However, their senior management is going to be getting a letter from me detailing my personal circumstances, my desire to move from Barclays, and my disappointment at HSBC not showing any interest in getting me on board as a customer.  I have a suspicion, only a small one, that somebody somewhere down the chain of command has made an arbitrary decision about certain things which the CEO would not want advertised.  The number of expatriates moving to Russia is only going to grow, and if HSBC has made the decision that they don’t want their custom, it’s probably one which won’t sit too well with some of the shareholders.

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10 Responses to Bye Bye HSBC Bank

  1. i have been a very satisfied customer of hsbc (channel
    islands) ever since i moved here some 10+ years ago. i would be surprised if they were not interested in more custom as they are opening/buying a bank here and are trying to provide a seamless service (which citi is not).

    i would suggest that if you fight your way past the front line sales people you might have more luck if you explain that you are an expat posted to russia and not a russian citizen – makes a real difference.

    oh and i have tried nat west and rbs, when they were different entities, and come nowhere near hsbc.

  2. varske says:

    Probably the person doing the refusing doesn’t even know where Russia is, just that it’s not on his list of EU countries.

    If it’s any consolation, Citibank in Greece refused to open a bank account for me, although I bank with them in London. They said it was because I was not Greek. I muttered about EU rules and equality of member states. They were astounded in London when I asked why I couldn’t have an account. Why would Greeks want to bank with Citibank rather than their expat customers? The time while I had battled with the London office was just long enough to find out that no expat in their right mind would bank with Citibank as the service was appalling. I got a lot of satisfaction in forcing them to offer me an account and then refusing because of the service.

  3. secretdubai says:

    A friend of mine recommended Allied Irish some time ago, perhaps you could try them?

    I am with HSBC Offshore and they are fine, but there are zero services in Dubai. You have to do everything in lengthy phone calls to Jersey (thank god for Skype and my proxy tunnel). I don’t really understand why HSBC Offshore has an office in Dubai nor what they do there. When they assigned me a “personal account manager” it was someone in Jersey as well.

  4. Tatyana says:

    COuld it be that some manager somewhere up the chain of command made this decision to avoid scandals like this one, that happened to NY branch of Bank of NY?

  5. Tim Newman says:

    A friend of mine recommended Allied Irish some time ago, perhaps you could try them?

    Yes, I’ve heard they are worth considering from the point of view that they offer very good rates of interest on their notification accounts. I’ve not heard much about their customer service though, but at this stage I’ll be impressed if they just agree to open an account for me!

    I dont really understand why HSBC Offshore has an office in Dubai nor what they do there.

    Ditto Singapore. The chap I was dealing with was very friendly, polite, and helpful but he simply didn’t know anything. All he could do was hand me the application form, which I had printed off the internet for myself anyway. Even simple questions had to be referred to the Isle of Man office.

  6. Tim Newman says:

    Tanya,

    Maybe that’s the case. But when activities on my account come to include “$7 billion in illicit transfers from Russia”, it can be assumed that my residential address will not be Sakhalin Island. :)

  7. Duffy says:

    The minimum vs. maximum balance thing is counterintuitive but does make sense. The require larger balances to avoid “smurfing”. The larger amounts trigger audits by governments which lets the banks off the hook to a degree as far as anti-laundering efforts go. I’ve emailed you privately with a list of possible banks you might consider. YMMV.

  8. Larry Barrow says:

    Tim,
    On one of my adventures I found myself as a maintenance mgr. at a oil terminal in the Dutch West Indies. I ran into some real characters there. Most of them kept a bank account at the Windward Islands Bank out of ST. Maarten. Apparently they could do banking anywhere in the world through this bank, no hassle Check it out.
    http://www.wib-bank.net

  9. Qatar Cat says:

    A very very dissatisfied HSBC customer here. Totally agree with SecretDubai – no services in the Middle East, whatever I needed I was always referred to Jersey. To the point that when I decided to close my account and withdraw the funds it took them TWO MONTHS to get “approvals” from Jersey. By which time I had already left Qatar and therefore wasn’t even able to close the account!

  10. Useful post. I too have had my challenges dealing with offshore banks, in my case a British bank in the Isle of Mann. First, they cancelled my (and every other account holder’s) US dollar checking account due to pressure from the Americans. Lloyds refused to hand over private banking information wholesale to the US government without reasonable cause. Second, they cancelled my ATM access card because I have ‘irregular income’ OK, so what? I pay my fees. Maybe it had something to do with my balance was up and down, never more than 10K and sometimes marginal (like fifty cents).
    Based on my hassles and the difficulties getting good value banking services I am considering starting a commercial newsletter for expats. It purpose would be NOT to sell outrageously-priced ‘banking secrets’ and second passports reports but rather provide real life experience and leads at a reasonable price. I used to open accounts in Switzerland and other countries for a pittance, and frankly I’m pissed off.
    The big question is are there enough people like me who want to PAY for impartial, accurate and up to date information. Personally, I get tired searching through forums and commercial websites for tidbits. I want it all in one place and no bullshit. And will promoting such banks etc have a negative effect of having them change their policies to small time expats on a budget?

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