Latest news with #BankOfLondon
The Guardian
14-05-2025
- Business
- The Guardian
‘Significant doubt' revealed over Bank of London's ability to keep operating
The Bank of London, the fledgling clearing bank formerly backed by Peter Mandelson, has revealed it is under investigation by UK regulators, with auditors saying the fallout could throw 'significant doubt' over its ability to keep operating. The news is a fresh blow for the troubled fintech, which has lost its founder and leading board members, including Lord Mandelson and US private equity boss Harvey Schwartz, and cut half its workforce since being thrust into the spotlight in September over an embarrassing winding-up petition by the UK tax authority over unpaid debts. The Bank of London (BoL) accounts, filed seven months late, now reveal that it is under investigation by the Bank of England's regulatory arm, the Prudential Regulation Authority (PRA), over potential breaches that pre-date the autumn debacle. 'The firm has been notified by the PRA that it is under investigation in relation to certain historical matters that occurred prior to the change in ownership of the group,' accounts filed at Companies House said. A Jersey-based firm, now known as Fellesskap Group & Holdings, took over as its parent company in May 2024. BoL said it was too early to say how much money it may have to put aside to deal with the continuing investigation. It said it was cooperating with the PRA and had launched its own internal investigation 'into the matters in question'. The revelations came as the bank reported a £12m loss for 2023, in accounts for which auditors at EY would only give qualified support, in part owing to 'inadequate historical records' over a share option plan for staff. Auditors are now concerned about the bank's ability to keep operating. EY said there were questions over the potential fallout of the regulatory investigation and whether the company would be able to raise adequate funding in future. 'There are material uncertainties relating to events or conditions that … may cast significant doubt on the company's ability to continue as a going concern,' the accounts said. As a clearing bank, the BoL does not offer loans but provides clearing and settlement services for business customers, providing the plumbing that allows transactions and payments to take place. It became only the second clearing bank to enter the UK market in 250 years when it launched in 2021, with an aim of disrupting the big four – NatWest, Lloyds, Barclays and HSBC – which have a stronghold on this part of the UK financial system. BoL was valued at $1.1bn (£826m) in 2023 and was previously known for its ties to the Labour party. Its founder, the former Barclays executive Anthony Watson, served on the party's business and enterprise advisory council before last summer's general election, while Mandelson, now Britain's ambassador to the US, served on the board as BoL's deputy chair before stepping down last year.
Times
14-05-2025
- Business
- Times
Bank of London under investigation by City regulator
A troubled start-up clearing bank that until last year had ties with Lord Mandelson has revealed that it is being investigated by the City regulator and sounded a warning about its finances. Bank of London, which claimed it had a valuation of more than $1 billion when it launched four years ago, disclosed in its delayed accounts for 2023 that the Bank of England's Prudential Regulation Authority was investigating 'certain historical matters' at the business. It also said that it was the subject of separate 'enhanced regulatory supervision' by the PRA because of shortcomings including in its financial and regulatory reporting. Furthermore, problems assessing a share option scheme for staff meant EY, its external auditor, gave only a 'qualified' opinion of the accounts. It comes
Telegraph
14-05-2025
- Business
- Telegraph
Bank founded by Labour donor investigated after year of chaos
A spokesman for the Bank of London said: 'These accounts relate to a financial year in which the bank operated under entirely different leadership.' Bank requires 'immediate additional capital' Since last year's turmoil, the bank has secured £57m from its main investor, Mangrove Capital. It has also appointed a new board and chief executive, with Christopher Horne, a former Credit Suisse director, tasked with leading the business. In its latest accounts, filed seven months late, the Bank of London reported it had fallen to a £12.4m loss in the year to December 2023. It also highlighted how it ran low on cash in early 2024, claiming the bank 'required immediate additional capital'. Bosses have since launched a restructuring of the business, which has resulted in the departure of more than 100 staff. Tensions over the Bank of London first emerged in September 2024 when it was hit with a winding-up petition from HMRC, one of the most serious actions a creditor can take. The filing took the bank unawares, which insisted it resulted from a 'simple administrative handling delay'. The petition was later withdrawn. Prior to his departure, the Bank of London had raised tens of millions of pounds under Mr Watson, a former Nike and Barclays executive. Mr Watson was also known for donating hundreds of thousands of pounds to Labour Party MPs, including Yvette Cooper, Peter Kyle and Wes Streeting. The latest results also revealed that EY, the bank's auditor, warned of a 'material uncertainty' hanging over the company's ability to continue as a going concern. It said it had uncovered that hundreds of thousands of pounds of revenue were wrongly accounted for, and flagged risks relating to the bank's financial controls. The bank also reported that 'inadequate record keeping' had left it unable to verify the accuracy of its share-based payments scheme, which was now being reviewed by the board. A Bank of London spokesman said: 'Under new ownership and with new leadership – and having secured £57m of Mangrove Capital-led funding and with a commitment of a further £25m – the bank has embarked on a comprehensive transformation. 'This transformation has seen the bank's governance greatly strengthened with a reconstituted board designed for robust oversight and strategic leadership.' Mr Watson was contacted for comment.
