Data theft affected 24,000 HSBC accounts
HSBC, Europe's biggest bank, said a theft of data by a former employee affected up to 24,000 Swiss client accounts, dealing a hefty blow to the reputation of its private bank.
The bank had previously said "less than 10 clients" were affected after Herve Falciani - a former HSBC computer specialist - stole client data from the bank which he handed over to French tax authorities.
“The theft, which was perpetrated by a former IT employee about three years ago, involves approximately 15,000 existing clients who had accounts with the bank in Switzerland before October 2006," HSBC said in a statement.
On top of that, up to 9,000 accounts that had been closed in the past were affected. These accounts often were not big enough to be eligible for private banking services, the bank said. It has 100,000 clients in Switzerland.
HSBC shares were down 0.4 per cent at 1034 GMT, just underperforming the European banking sector.
The controversy comes at a sensitive time for the secretive sector - which serves rich clients - with countries sometimes using stolen client data to chase tax evaders, a practice one Swiss lawmaker has likened to bank robbery.
Swiss banking giant UBS has seen billions of Swiss francs of client money gush from its wealth management operations amid repeated blows to its reputation from a high-profile US tax case and massive writedowns that forced it to accept a government bailout in the crisis.
Germany's finance minister, Wolfgang Schaeuble, raised the bar in the fight against tax evasion further last month, saying Berlin was prepared to pay for stolen data on potential tax cheats at an unnamed Swiss bank.
HSBC said in December that an ex-employee had stolen data from its Swiss private bank's headquarters in 2006 and 2007, but said to the best of its knowledge fewer than 10 clients were involved.
HSBC "unreservedly apologised" to clients for the threat to their privacy on Thursday, but said Swiss authorities said they will not support the use of the stolen data to answer requests from foreign authorities about tax issues.
Mr Falciani is also reported to have attempted to sell the data to Germany for €2.5 million, which tax investigators there estimated could rake in €100 million for German coffers.
Alexandre Zeller, chief executive of HSBC's private bank in Switzerland, said Mr Falciani transferred data onto a computer other than the one the bank issued him and fled to neighbouring France while under investigation.
Data theft risk was endemic to the business, Mr Zeller said, adding that the bank had already added protection against this with USB keys and other technologies.
"We will always have new threats and we always have to invest more to ensure the IT security is all it can be," Mr Zeller said. "At the end of the day, whatever you do, the human factor will remain. Private banking is a business of trust."
The stolen client information is limited to accounts in Switzerland, excluding ex-HSBC Guyerzeller accounts.