On 23 March 2026, the Prudential Regulation Authority (PRA) issued a Final Notice to The Bank of London Group Limited (BLG) and its parent company, Oplyse Holdings Limited (Oplyse), imposing a financial penalty of £2 million in connection with prudential and governance failings which included misleading the PRA over capital positions and failing to maintain adequate financial resources.
Key takeaways
More details on the findings are set out below but our key takeaways are as follows:
- Openness, transparency and integrity: This is the first time the PRA has fined a firm for lack of integrity. As well as illustrating the importance of providing accurate information to the PRA, the decision underlines the need for firms to raise issues of possible concern at an early stage, particularly when information relates to specific enquiries the PRA has made, and potentially material emerging issues relating to a firm’s capital position should be promptly notified given its central importance to safety and soundness.
- Reacting in a prudent manner: The PRA found that BLG failed to take steps necessary to address breaches in the large exposure rules arising from increases to an undocumented loan from BLG to Oplyse which constituted a large proportion of BLG’s regulatory capital. When members of senior management become aware of breaches, failing to act promptly to resolve matters exacerbates the issue and can become an additional failing.
- Parent company liability: This is the first time the PRA has taken enforcement action against the parent financial holding company of a firm. Oplyse is not authorised to undertake regulated activities but it is required to comply with certain provisions of the PRA Rulebook including applicable consolidated capital requirements. Parent financial holding companies must have in place adequate internal arrangements for complying with the requirements with effective governance over these. The PRA also expects openness and transparency from such parent entities to enable the PRA to monitor them as required.
- Wider group context: Being part of a wider group can create risks which adversely impact on safety and soundness and firms should be able to identify, evaluate and manage potential and actual risks from large exposures including to other entities in the same group.
- Governance and maturity: The PRA expects firms to have robust validation and governance processes which ensure that large exposure risks are identified before entering into a transaction and that regulatory reporting is consistently of a high standard including with regards to large exposures. These risks should be widely and fully understood by firms’ risk, governance and oversight functions, with governance in place for upwards reporting to the board where appropriate. The PRA also expects banks to mature rapidly across all areas of their business including investing significantly in developing governance, controls and capabilities. Where new banks are loss making and rely on capital injections, they are vulnerable to capital not being available when needed and should have a credible capital plan for new capital to be injected in good time. A failure to adequately manage capital may be viewed by the PRA as indicative of the firm not managing resources prudently or of failures to maintain adequate resources.
- Remediation: The Final Notice comments that, since the Relevant Period (defined below), there has been a material change in ownership of both entities with new investors providing additional capital; most of the senior management being replaced; heavy investment in processes; and controls and engagement of third parties to assist in remediation. These more hidden costs of remediation emphasise the importance of establishing appropriate governance from the outset.
Key information
Decision maker | PRA Settlement Decision Makers |
Firm | The Bank of London Group Limited and Oplyse Holdings Limited |
Related material | None |
Sanction | Financial penalty of £2,000,000 (reduced from £12,000,000 on the grounds of serious financial hardship) |
Settlement | Yes – but no additional settlement discount applied following reduction for financial hardship |
Provisions | PRA Fundamental Rules 1,3, 4 and 7 Chapter 3, Articles 5 and 7, Reporting (CRR) Part of the PRA Rulebook Articles 393, 394 and 395, the Large Exposures (CRR) Part of the PRA Rulebook Rule 2.3 of the Notifications Part of the PRA Rulebook Rules 2.1 and 2.3 of the Related Party Transaction Risk Part of the PRA Rulebook Rule 7A of the Definition of Capital Part of the PRA Rulebook |
Relevant period | 7 October 2021 to 22 May 2024 |
Factual findings | BLG became an authorised firm on 7 October 2021 and was granted Authorisation with Restriction, also known as “mobilisation”; a stage which allows new banks time to finalise and deliver on certain matters. On 5 January 2023, the PRA approved BLG’s exit from mobilisation, subject to confirmation of sufficient CET1 capital being in place. On 20 January 2023, a then senior executive of the firm confirmed to the PRA that sufficient capital was in place to exit mobilisation. On 26 January 2023, further evidence was provided to the PRA of available regulatory capital above the required level. However, it was subsequently determined that some of this evidence provided to the PRA (and additional material subsequently provided) had been falsified, including client account statements, emails, letters from investors and a communication from a regulatory consultant. The PRA also found that senior executives at BLG were aware in February 2023 that BLG had not received any of the funds which the PRA had been informed it held as CET1 capital and that consequently the true capital positions of BLG and its group were knowingly misrepresented to the PRA. On 25 September 2023, the PRA sent BLG a Mid-Point Review Letter raising a series of concerns, including in relation to governance, culture and oversight of financial information and capital resources. In response to this letter, BLG provided further information to the PRA which supported the incorrect capital position previously communicated to the PRA and made statements regarding future investments which did not in fact transpire. During the course of 2024, there were further instances of BLG’s capital position being incorrectly recognised and reported to the PRA, resulting in formal letters being sent by the PRA to BLG expressing concern in relation to BLG’s compliance with capital requirements. BLG also failed to comply with the PRA’s rules in relation to large exposures. |
Failings | The PRA found that BLG had breached the following Fundamental Rules:
The PRA found that both BLG and Oplyse breached certain other articles of the PRA Rulebook relating to reporting and capital and that BLG also breached articles relating to large exposures, notifications and related party transaction risk. |
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