HSBC handled a gay banker’s dismissal in a fair but not perfect way, a senior HSBC executive admitted to an employment tribunal yesterday.

Peter Lewis, the bank’s former equity head, was sacked after a disciplinary hearing where a fellow employee accused him of masturbating in front of him, but Mr Lewis claims he was discriminated against because of his sexual orientation.

The head of the disciplinary hearing last year, Charles Laughton-Scott, told the Stratford tribunal, “We considered it had been a fair process. Was it perfect? No.”

He said he was inclined to uphold Mr Lewis’s appeal until he visited the gym where the incident is alleged to have taken place, and concluded that it would have been possible for the reported events to have taken place.

Mr Laughton Scott revealed that after interviewing the unnamed employee who made the complaint (Mr A), he felt he was straightforward, “I was not impressed that Mr A had called the claimant a ‘nonce’ as this suggested to me that Mr A was not a particularly pleasant person, but I did not think it indicated that he is homophobic.”

“I also thought that Mr A did not know what this word meant anyway.”

Mr Lewis’s lawyer, Chris Quinn, asked if Mr Laughton Scott, deputy head of global banking, had favoured Mr A to his client as he was gay.

“Absolutely not,” Mr Laughton-Scott said.

The closing statements by both sides are expected today.