[2025] UKUT 00185 (TCC)

On 12 July 2018, the Bank issued its half year update; this included a statement that its Pillar 2A requirement of 1.7% was “currently under review with the PRA” and the Bank “anticipated receiving capital relief from the PRA as part of the Pillar 2A Offset”; and also that the Bank also anticipated transitioning to AIRB on residential mortgages in H2 2019, see §111.

The PSM letter sent on 10 September 2018 said that the PRA was “somewhat frustrated” that the Bank had referred publicly to the discussions on the Pillar 2A offset and to the AIRB application; that the PRA had not yet reached a conclusion on either matter and “would not wish to see a repeat” of this type of public disclosure, see §132.

The Bank’s response to the PSM letter, which was agreed at the October 2018 Board meeting, did not respond to the PRA’s criticism of its public statements about the Pillar 2 offset, but said that “public referencing of the [AIRB] process merely restated the PRA’s published guidelines, though again your comments in this regard are noted and accepted”, see §234.

The Q3 Update included the statement that “there is no update to the AIRB application for residential mortgages submitted earlier this year and we still expect an outcome in 2H19”, see §220(2).

On 24 October and 2 November 2018 Mr Arden told analysts “our application for AIRB is with the PRA, and our expectation remains that that will be an H219 event”, see §239 and §241.