HSBC stands by move to raise charges by 200%

HSBC has defended its decision to increase service charges by up to 200 per cent, saying the move is necessary because of a rise in transaction costs.

The bank, which reported profits of $522 million (Dh1.9 billion) in the UAE in the first half of this year, sent a letter to customers outlining changes that come into effect on September 1. All existing and new account-holders throughout the country will be affected.

The special clearing charge will go up to Dh150 per cheque within the emirate where the account is held – triple the current fee of Dh50. Special clearing in another emirate will cost Dh200 per cheque, double the existing fee. The charge for cheques drawn on a customer's own account but returned unpaid because there are insufficient funds will increase by 66 per cent.

The monthly service charge for salary and deposit customers will be increased by 43 per cent to Dh100 from Dh70. The bank is halving the number of free over-the-counter transactions allowed every month, and doubling the fee for lost or damaged ATM cards to Dh50.

Charges imposed if the minimum monthly average balance is not maintained are being doubled while the fee for issuing a manual telegraphic transfer is to be increased by 20 per cent.

A spokesman for HSBC Middle East said the new pricing structure was in line with the market and was not linked to the bank's profits.

"This is part of the annual review of fees," he said.

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