Activity

The Bank of London has indeed announced that it is under investigation by UK regulators, specifically the Prudential Regulation Authority (PRA), which is part of the Bank of England. This disclosure was made in the bank’s recently filed accounts, which were submitted several months late.
Here’s a summary of the key issues and context surrounding the investigation:
Potential Breaches and Concerns:
* “Historical Matters”: The investigation centers on “certain historical matters” that occurred prior to a change in the bank’s ownership in 2024.
* Inaccurate Record-Keeping and Regulatory Reporting: Reports indicate that the PRA is investigating the bank for unspecified “historic” events, as well as for inaccurate record-keeping, lax regulatory reporting, and governance failures.
* Late Account Filing: The bank’s 2023 accounts were filed seven months late, which is a significant regulatory concern in itself.
* Auditor Concerns: The bank’s external auditor, EY, issued a “qualified opinion” on the accounts, raising concerns about the valuation of an employee share option scheme and highlighting “material uncertainties” that could cast “significant doubt” over the bank’s ability to continue as a going concern. This essentially means the auditors are not fully confident in the bank’s financial statements or its future viability.
* Unpaid Tax Bill: In September 2024, the Bank of London faced a winding-up order from HM Revenue & Customs (HMRC) over unpaid tax bills. While the bank stated this was an “administrative error” and the issue was later resolved, it added to the turbulence.
* Leadership Changes and Workforce Reductions: The bank has experienced a turbulent period, including the departure of its founder and chief executive, Anthony Watson, and a significant reduction in its workforce (nearly half) last year due to a funding crisis.
Bank of London’s Response and Current Situation:
* Cooperation and Transformation: The Bank of London has stated that it is cooperating fully with the PRA’s investigation and is conducting its own internal investigation into the matters. They emphasize that the accounts under investigation relate to a financial year under “entirely different leadership” and that the bank has “embarked on a comprehensive transformation.”
* Strengthened Governance: The bank claims to have significantly strengthened its governance with a reconstituted Board and a new executive team (including a new CEO, CFO, CRO, and Chief of Staff & Transformation).
* New Ownership and Funding: The bank transitioned to new ownership under Fellesskap Group & Holdings in 2024 and has secured new funding, including a further £25 million commitment from existing investors if needed.
* Focus on UK Payments Market: The bank has also refined its strategy to focus on the UK payments market.
Despite these efforts to stabilize, the regulatory probe and the auditors’ concerns suggest that the Bank of London faces a challenging path ahead. The full scope and potential consequences of the PRA investigation are not yet publicly detailed.

Video courtesy of ABN-AMRO

Video courtesy of ABN-AMRO