The Bank of London is under investigation by UK regulators, raising serious concerns about its future viability, according to auditors EY. In delayed annual accounts finally filed, the UK-based clearing bank revealed it had been notified by the Prudential Regulation Authority (PRA) of a probe into “certain historical matters” that occurred before a recent change in ownership.
That change took place in 2023, when the business was acquired by the Fellesskap Group & Holdings. While the specific nature and potential costs of the regulatory investigation remain unknown, EY has issued a stark warning, stating there are “material uncertainties” that could cast “significant doubt” on the bank’s ability to continue as a going concern.
Launched publicly in 2021, the Bank of London set out to disrupt the clearing and settlement space, offer transaction banking services to corporates, and deliver banking-as-a-service solutions for companies embedding financial tools into their platforms. Despite this ambition, the bank remains loss-making, though it claims to have attracted over 4,500 business customers and more than £500 million in deposits.
The past year has been tumultuous. In September, UK tax authorities issued a winding-up order over unpaid liabilities, just days after founder and CEO Anthony Watson stepped down. The bank attributed the issue to an “administrative error” and denied any link between the payment failure and Watson’s departure.
Following the turmoil, the bank raised £60 million in new capital, restructuring its ownership under Mangrove Capital Partners, appointing a new board, and naming a successor to Watson. The company now faces mounting scrutiny as it navigates this pivotal regulatory and operational challenge.