Government inquiries cost us £100m, says HSBC boss

HSBC, Britain's largest bank, yesterday attacked the Government for launching an unprecedented number of reviews into the banking sector and said it has had to spend more than £100m in the past three years responding to their demands.

Sir John Bond, the chairman of HSBC, told shareholders at its AGM that the bank would have to find a further £40m this year to comply with the rulings of the Competition Commission's inquiry into small business banking.

Sir John, a staunch critic of the Government's interventionist approach, said: "The cumulative effect of the various regulatory measures we are seeing in the UK is not actually in the best interests of our shareholders, our customers, the financial services industry or, perhaps, the public at large."

In the past two years, Britain's banks have had to supply reams of documents for the inquiries, which have included the Cruickshank review into bank competitiveness, the DeAnne Julius review of banking consumer codes, reviews of ATM charges and the introduction of CAT standards. They are now contending with Ron Sandler's investigation into long-term savings.

Sir John, a veteran of the international banking scene, said: "Much of this work was necessary and we supported it. But some of it was not."

Don Cruickshank, now chairman of the London Stock Exchange, said the banks were charging excess profits of £5bn a year. The Big Four deny the charges. Matt Barrett, the chief executive of Barclays, told a Treasury select committee earlier this month: "I reject it completely. I don't think I know what excess profits means."

Royal Bank of Scotland, Lloyds TSB, Barclays and HSBC are angry at the outcome of the most recent review, because it has stipulated that banks either start to pay interest on business current accounts or offer fee-free banking. Sir John said this was "effectively price control".

Sir John also took the opportunity to assure shareholders that HSBC was committed to maintaining its investment bank, after it haemorrhaged a few high-flying employees in the past few months.

On the bank's global outlook, Sir John said conditions in Argentina remained critical. Last year, the bank made a $1.1bn (£751m) provision against the country and future options are assessed daily.