HSBC customers in the UK pulled £3.6billion from accounts in the summer as they were squeezed by cost of living pressures.
As profits surged to £6.4billion in the third quarter, finance director Georges Elhedery said withdrawals were mainly due to households paying for increasingly pricey goods.
It came as Bank of England figures showed the £200billion-plus war chest of extra savings built up by households during the pandemic is now almost zero.
And separate research from Royal London suggested that hard-pressed consumers have pulled out £32billion in the past year as they face rising housing, food and energy bills.
HSBC said the fall in customer deposits reflected ‘the higher cost of living’ and competition with other lenders.
Uncertainty: As profits surged to £6.4bn in the third quarter, finance director Georges Elhedery (pictured) said withdrawals were due to households paying for pricey goods
Elhedery said: ‘We’ve seen this reduction come in the form of additional spend that our customers were using for their daily purchases. A small number of it is chasing higher yields somewhere else.’
He said the UK economy overall had shown ‘resilience’ and the bank had seen growth in mortgage lending but added: ‘There is certainly uncertainty.’
It set aside an undisclosed provision to take account of that and Elhedery said it was keeping a close eye on mid-sized business customers ‘involved in discretionary spend of consumers’.
‘They have been most affected by high inflation and they cause the higher risk,’ he said. ‘Apart from a few names, we have not seen deterioration in the sector.’
HSBC, which is based in Britain but makes most of its money in Asia, was the latest major UK bank to reveal a boost to profits from rising interest rates following results from Barclays, Lloyds and NatWest.
All four were yesterday criticised for being ‘far too slow to reward savers through better rates on instant access savings accounts’ by Harriett Baldwin, chairman of the Commons Treasury select committee.
HSBC’s headline profit figure of £6.4billion for the three months to the end September – more than double its earnings in the same period last year – looks unlikely to quell such criticism.
But there are signs the big boost to profits caused by higher rates is coming to an end.
HSBC’s net interest margin, the gap between the money it makes from borrowers and the returns it must offer savers, shrank slightly compared with the previous period though it was up on last year.
UK deposits are £13.9billion lower than a year ago but still £50billion higher than at the end of 2019.
It came as Bank of England figures showed a continuing trend of customers looking to park money in higher interest rate paying savings products.
Behaviour has changed since the pandemic when households, unable to spend money on going out, built up additional savings estimated at more than £200billion.
Analysis by Simon French, chief economist at Panmure Gordon, suggests that the gap has now closed.
Household deposit levels of just over £1.8trillion are now roughly the same as they would have been if they had kept growing since February 2020 in line with inflation, the analysis showed.
