HSBC's woes over its private bank in Switzerland continue with reports that France is to take the bank to trial.

Hong Kong/London-listed HSBC has been told by France’s financial state prosecutor that its private banking arm will be sent for trial due to alleged tax fraud, media reports said.

The removal of data from the Swiss private banking arm of HSBC as far back as 2006-2007, which has recently been revived as a major news story as claims have been made about alleged tax evasion by clients, continues to cause shockwaves for the bank.

"This is a normal step in the judicial procedure and the outcome of the matter is not determined as of today,” a spokesperson for the bank was quoted as saying.

Reports said French authorities are examining claims of alleged tax fraud involving 3,000 French taxpayers after the publication of files removed from the bank by Hervé Falciani.

Swiss authorities, as reported here previously, deny that Falciani is entitled to call himself a whistleblower and have prosecuted him for allegedly trying to sell the account data for financial gain.

The saga of HSBC’s private bank has hit its reputation at a time when such institutions are seeking to recover from the long shadow cast by the 2008 financial crisis. HSBC says that since 2008, it has drastically overhauled its operations, shutting down a number of accounts at the Geneva-based private bank, and reducing the amount of assets run from there. This publication understands that some of the accounts concerned have been shut as far back as 1992.

A controversial aspect of the case is that removal of the data from the bank is a serious breach of Swiss bank secrecy law.

The bank now has one month to respond after which magistrates will have the final word on whether to hold a trial, reports said.

UK lawmakers have already grilled senior HSBC executives, including CEO Stuart Gulliver, about the matter. Gulliver even took to the newspapers in issuing full-page statements a few weeks ago to apologise for the saga.