[2025] UKUT 00185 (TCC)

The Board also considered a draft response to the PSM Letter. In response to the criticism of the Bank for having referred publicly to its discussions with the PRA about the AIRB model, the draft response said:

“With regard to AIRB, as you know this has a material impact on our capital plans and we are keen to progress our application. Public referencing of the process merely restated the PRA’s published guidelines, though again your comments in this regard are noted and accepted.”

The letter did not respond to the PRA’s similar criticism of the Bank for having stated publicly that there was “an expectation that Metro would benefit from the Pillar 2A offset”. In relation to RWAs, the draft response said:

“We are making good progress on remediating the classification of commercial risk weights in our lending portfolio. We have engaged an expert third party to provide external assurance over work completed to date and provide a full review of our RWA calculations and COREP reporting. As you can appreciate, this work will take a number of weeks before the CFO is able to attest to its efficacy and accuracy. Thereafter, the Board will review the long term capital plan in January 2019, as agreed with our supervision team.”

The Board approved the response, with minor amendments, none of which changed either of the passages set out above.The letter was sent on 25 October 2018.