The Prudential Regulation Authority (PRA) has fined The Bank of London Group and its parent company Oplyse Holdings £2 million for "misleading the PRA over their capital positions, failing to act with integrity, failing to be open and cooperative with the regulator and failing to maintain adequate financial resources".
This is the first time the PRA has fined a firm for failing to conduct its business with integrity, and the first time the PRA has taken enforcement action against a parent financial holding company of a firm.
The PRA’s investigation found that between October 2021 and May 2024 the Bank of London Group and Oplyse Holdings failed to comply with their regulatory capital requirements over an extended period and repeatedly misled the PRA as to their actual capital positions. Most seriously, this included providing the PRA with several fabricated documents intended to provide a false picture of the capital position.
The PRA says the firms failed to be open and transparent with it on "numerous further occasions", including in relation to their deteriorating solvency position.
In addition, the firms failed to manage or report a large exposure resulting from a loan from the Bank of London Group to Oplyse Holdings.
The breaches in this case warranted a financial penalty of £12 million. However, the PRA says the Bank of London Group and Oplyse Holdings have demonstrated that "payment of such a penalty would cause serious financial hardship" and the PRA has therefore reduced the penalty to £2m.
Sam Woods, deputy governor for prudential regulation and CEO of the PRA, said: “Trust in banking in the UK requires integrity and open communication with the PRA from all banks, regardless of their size. The Bank of London Group Limited and Oplyse Holdings Limited fell well below our standards, resulting in today’s penalty which marks the PRA’s first finding against a firm for acting without integrity.”
A spokesperson for The Bank of London commented: “The Bank of London Group Limited and its parent company Oplyse Holdings Limited acknowledge the PRA’s Final Notice published today, imposing a £2m financial penalty in respect of the regulatory breaches that occurred between 7 October 2021 and 22 May 2024. The matters described in the notice relate to a period when the Bank was under previous ownership and management.
“The Bank accepts the PRA’s findings and regrets the failings identified. As is acknowledged in the Final Notice, since the change in ownership, the Bank has changed its management team and invested heavily in processes and controls and engaged third parties to assist in their remediation activity. The Bank has been implementing a comprehensive remediation programme, and is continuing work to strengthen further its governance and risk management arrangements, and its financial and regulatory reporting controls.
“The Bank, its new management and its investors remain committed to an open, transparent and constructive relationship with the PRA and FCA. The Board and leadership team are confident that, with these legacy matters settled and with the backing of its investors, the Bank will continue to enhance trust and be able to return to growth in 2026.”
