After 22 years of banking with HSBC for his business, Vancouver floral shop owner Gabriel Yiu was shocked to learn last week that the bank was cutting off his account.
He is one of several small business clients whose bank account with HSBC has been cancelled after the bank sent out letters last week saying it is reviewing its clientele.
But Yiu, who owns three Gabriel & Angela flower shops with his wife Angela Leung in Metro Vancouver, believes HSBC — which is headquartered in Vancouver and bills itself as the “world’s local bank” — is closing the accounts of its least profitable clients. He says it’s outrageous and discriminates against small business owners.
The couple is not only losing their floral shop account with HSBC, but also an account for their not-for-profit organization called the Vancouver Hong Kong Forum Society. Yiu said he has heard from several friends with small businesses who also received letters from HSBC. It’s unclear exactly how many businesses have had their accounts cancelled. Calls to the bank’s public relations staff were not returned over the weekend.
Yiu and Leung received two letters from HSBC, one on Thursday, the other Friday, saying they have 60 days to close their accounts because the bank has recently conducted a “strategic review” of its business banking services to focus resources “on customers that will benefit most from our expertise.”
“My wife was so upset. She was in shock. It’s a lot of trouble for us,” Yiu said, adding they have always been in good standing with the bank and never had a cheque bounce.
“We’ve been using this bank since our inception in 1991. All our business, our rent, credit to our accounts and all our cheques, everything goes through this bank. We just spent $200 getting new cheques and now they will be all voided.”
They have already opened a new business account at the Royal Bank, where they do their personal banking, and Yiu said a Royal Bank staffer told them the bank had received many new clients because of HSBC’s decision to close small business accounts.
He said when his wife Angela went into their HSBC branch and asked an employee about the letters, the employee just read out the statements already disclosed in the letter.
In one of Yiu’s letters dated Dec. 9, Nigel Davis, head of banking at HSBC, writes:
“As a result of this review, we have made the difficult decision to end our banking relationship with your business. We recognize that this may be a disappointment and to enable you to make alternate banking arrangements we will maintain your accounts with us for up to 60 days.”
He said all banking will be terminated by Feb. 14.
However, the only reason given for the decision is because of the strategic review. Yiu says that’s not good enough and wants answers. The situation, he said, has left them frustrated and worried that other banks could follow suit.
“It’s obvious that HSBC is closing the small business accounts with low profitability. This is outrageous and it’s discriminatory. Can a bank decline opening an account to a person because that person is poor? So why a bank can decide not to accept a business because it’s small or simply not profitable for the bank?”
Yiu said he hopes HSBC will reconsider its decision.
In a news release last week aimed at scooping up some of the clients HSBC was shedding, Langley-based Envision Financial said “many small business owners in Canada and the U.S. were surprised when they received notice from HSBC advising them it would be ending their banking relationship by closing selected small business banking accounts.”
The financial institution said it was already seeing HSBC clients come into its branches quoting letters from HSBC.
“Small businesses are the backbone of our communities in British Columbia and nationwide making up 98 per cent of all businesses in Canada,” said Envision’s financial president, Shelley Besse, in a statement. “ ... We want to make it simple for them to find a financial institution that can meet their needs.”
Envision said it will offer three months free access to unlimited chequing for business clients who lost their account with HSBC.
