The Bank of England’s Prudential Regulation Authority (PRA) has published a Policy Statement and Supervisory Statement clarifying its expectations for international banks operating in the UK through branches, including expectations for branch business, booking models and liquidity reporting. The package also adjusts deposit-related thresholds and introduces an indicative retail deposit level beyond which firms are generally expected to operate as UK subsidiaries rather than branches. The PRA increased the existing £100m and £500m thresholds around Financial Services Compensation Scheme (FSCS)-covered deposits by 30% to reflect inflation since calibration. It also introduced a new indicative threshold of £300m of total retail and small business instant access deposits, above which international banks are generally expected to operate as subsidiaries to give the PRA greater visibility and influence, citing contagion risk and lessons from the failure of Silicon Valley Bank. The statements apply to all international firms operating in the UK. The changes are set out in Policy Statement PS 6/25, which updates Supervisory Statement SS5/21 and branch reporting expectations.
Bank of England 2025-05-20
Bank of England's Prudential Regulation Authority updates UK branch expectations for international banks and introduces a £300m indicative retail deposit threshold
The Bank of England's Prudential Regulation Authority (PRA) issued a Policy and Supervisory Statement for international banks in the UK, covering branch business, booking models, and liquidity reporting. The PRA increased deposit-related thresholds by 30% and introduced a new £300m threshold for retail and small business deposits, above which banks must operate as subsidiaries. These changes aim to enhance oversight and mitigate contagion risks, referencing lessons from the Silicon Valley Bank failure.