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HSBC said it could take a US$600 million ($745 million) hit from a court case into whether British bank charges are legal and fair, raising the prospect that customers could win billions in refunds from banks.
A test case on UK bank charges began earlier this year in the High Court and is expected to be a long legal battle. HSBC is the first to outline the potential full impact.
"Based on the facts currently available to it, and a number of assumptions, HSBC Bank estimates that the financial impact could be approximately US$600 million," the bank said in its annual report.
That would be on top of refunds of £115 million ($284 million) it paid out last year, before refunds were suspended across the industry pending the court decision.
Joe Garner, general manager of HSBC's UK personal financial services, said the figure was "a best estimate" made by auditors and there was a wide range of estimates.
Britain's major banks and the consumer watchdog are seeking to provide clarity on a long running dispute on the charges applied to unauthorised account overdrafts, after thousands of customers reclaimed millions of pounds in refunds.
- REUTERS
