The Trouble with Banks

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Banks have been the subject of much criticism in recent years and many of us feel it is well deserved. Some banks seem to give you a reasonably decent deal while others look for every opportunity to add extra charges to your account. I was made keenly aware of this when my account in Singapore was hit with some hefty charges this year. I have banked with HSBC in Hong Kong for many years, and I also opened accounts with them in KL and, more recently, Singapore to facilitate transfers between the countries.

I have noticed that HSBC Singapore has a very different scale of fees than the other branches, presumably justified in their minds because they are located in a major financial centre. After completing some business in Singapore, I decided to leave around S$3,000 in the account rather than close it and have to open a new account when we returned. However, I discovered that HSBC Singapore doesn’t like companies which have small balances and would therefore charge a monthly fee of S$35 (RM88) as punishment for not leaving a larger balance with them. By contrast, I have an account with a similar balance with Barclays Bank in the UK, which has been essentially dormant. They charge me nothing.

This year, HSBC Singapore decided that this “nominal” charge was not proving sufficient deterrent to the little guys who felt they could have an account with a major bank and not put some decent money to play. So in January, they increased the charge by a staggering 186% to S$100 (RM250) a month. When I asked the customer service officer whether she felt a phone call asking me to close the account might have been appropriate given the massive increase in the charges she seemed genuinely shocked. Apparently they preferred to transfer my money into their revenue account than return it to me.

I immediately decided to close the account by transferring the balance to my KL account but I found I could not access my online facilities. This was not to prevent me withdrawing my money but rather because I had been negligent in not checking my declining balance each month and therefore had my access privileges revoked for non-use. Naughty me.

I then managed to get a friend to give me cash for a cheque drawn on the account, but unknown to me, my auditors had asked the bank to confirm the balance as part of their annual audit. HSBC had immediately charged my account S$50 (RM125) for this massive effort so the cheque bounced. This gave rise to another S$50 charge for this outrage. It’s worth noting that HSBC KL charged me RM10 for doing the same balance confirmation.

I then wrote to HSBC Singapore asking them to close out the account and complaining about all the charges. I received a “without prejudice” reply and they reversed the increase in the ‘low balance’ charges imposed this year. A small triumph for the little man!

However they had the last laugh. During the time I had an online account, I had not printed out statements so my Hong Kong auditors asked HSBC Singapore and Malaysia to send them copies. HSBC in KL, where I have an active account charged me RM24 for doing this, a laughable charge by Singapore standards. HSBC Singapore charged me S$450 (RM1,125) for sending a copy of my dormant balance to my auditors!

To be fair, HSBC did suffer a 17% drop in their bottom line last year, with profits sinking to a paltry US$20.6 billion. Apparently this resulted in only 205 employees making over the magic £1 million (RM4.8 million) a year with bonuses – clearly a cause for grave concern. I assume the head office sent out urgent messages to their key financial centres asking them to address this issue as a priority. Possibly some enthusiastic young expat employee in Singapore raised his hand and said, “Can I suggest a 186% increase in the low balance charges, sir?” “Excellent thinking, Winslow, get to it young man!”

My brother used to work for a bank, so I know that not all employees can be blamed for the current reputation so many banks enjoy, so let’s spare a thought for the mostly innocent frontline employees who have to face the angry customers.

Have a great month.



Source: The Expat August 2013

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