Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00185 (TCC)

Fecha: 09-Abr-2025

Findings of fact

Findings of fact

278.

We have already made the following findings:

(1)

In July 2018, the PRA identified that the Bank had been applying 50% risk-weighting to the CLIP loans rather than the correct 100%, and that this was “a serious issue”, which would cause “a large material change” to the Bank’s position, see §102.

(2)

Ms Gillan responded the same month, saying that the Bank recognised that 50% was inaccurate, and would revert with further details, see §110.

(3)

Mr Gunn told the PRA at the meeting on 6 September 2018 that “as to the miscalculations of capital required to support commercial lending, that was clearly an error on our part and was being fixed”, see §131(1).

(4)

The Bank’s mistake with the RWAs for CLIP loans had “caused agitation” at the PRA because it was “perceived as the firm not being able to get the basics right”, see §137.

(5)

At the subsequent meeting with the PRA on 12 September 2018, Mr Donaldson “expressed sincere regret and apology for the error” and expected it would be corrected by October/November.

(6)

On 4 October 2018, Mr Arden sent Mr Sutherland the email set out at §160. This included the following:

(a)

the Bank was making good progress in remediating the classification of the risk-weighting;

(b)

it was in the process of engaging an external third party (Deloitte) to provide “external assurance over work completed to date and provide a full review of our RWA calculations and COREP reporting”;

(c)

that work would take a number of weeks;

(d)

Ms Gillan and Mr Arden needed to be sure about “the efficacy and accuracy of the results of this exercise” before they submitted any changes to the PRA; and

(e)

in consequence, COREP reporting for September would be “materially unchanged”.

(7)

Mr Sutherland viewed this as a pragmatic solution to the issue of COREP submissions which required the input of specific figures, given that Metro Bank was in the process of conducting a remediation of its Pillar 1 commercial risk weightings and its capital requirements. He responded on 9 October 2018, saying “That’s fine David, thank you for confirming”, see §161.

(8)

The RWAs included in the Bank’s September COREP report were therefore the same as those in the Q3 Update.