The Bank of London, a new Fintech high -profile company that the State of Unicorn affirmed only four years ago, has revealed that it is under investigation by the Prudential Regulation Authority (PRA) of the Bank of England and faces questions.
In long -standing accounts by 2023, the compensation bank revealed that PRA is examining “certain historical issues” in the business and has placed it under “improved regulatory supervision” due to the deficiencies in its financial and regulatory reports. The bank’s external auditor, EY, issued a qualified opinion on Conerns linked to the assessment of a staff participation option.
Revelations limit a turbulent period for the Bank of London, which was forced to reduce its workforce by almost half last year a severe financing crisis. Despite ensuring a capital injection of £ 52.1 million led by Capital Mangrove in August 2023, followed by other £ 3.7 million, the company warned about “material uncertainty” around its future financing, collecting Conern.
The bank broke into the scene in 2021 with high ambitions to interrupt the banking infrastructure of the United Kingdom and clear transactions more efficiently. It became the second new compensation bank to launch in Britain in 250 years and claimed an assessment of $ 1.1 billion, backed by investors that granted the status of unicorn.
High profile names such as Lord Mandelson, now ambassador to the United Kingdom in the United States, and Harvey Schwartz, current executive director of the private capital giant Carlyle, celebrated directions. Both renounced last October in the middle of a wider joint room jolt caused by the company’s financing problems. The founder Anthony Watson, who previously served as executive director, also left the business.
The bank’s workforce, which is added to 200, is now in around 100 after a restructuring directed by the new CEO Christopher Horne.
A spokesman for the Bank of London confirmed that PRA investigation is related to events before mangrove acquisition and that the business is fully cooperating with regulators. Pra declined to comment.
Despite the scrutiny, the bank insists that it has entered a new stabilization phase. Recently an additional commitment of £ 25 million of capital mangrove investors has been ensured, and the company states that “it has embarked on an integral transformation”, including a new framework of governance and reconstituted by restoring confidence.
The Bank also faced questions last September after it was revealed that HM Ingss & Customs had presented a request for liquidation on unpaid taxes. That problem has been solved since then.
Losses before taxes at the Bank of London totaled £ 12.4 million in 2023, after a loss of £ 12.8 million the previous year.
Once promoted as a great challenger in the banking panorama of the United Kingdom, the Bank of London now finds that regulatory scrutiny, the uncertainty of investors and reputation damage. It remains to be seen if your last leadership review and its new capital injections are sufficient to stabilize the ship.
Paul Jones
Harvard Alumni and former New York Times journalist. Business Matters editor for about 15 years, the largest commercial magazine of the UKs. I am also head of the Automotive Capital Division Business Media who works for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.
