Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00185 (TCC)

Fecha: 09-Abr-2025

The Q3 Update

The Q3 Update

217.

The text of the draft Q3 Update was the same as that considered by the Audit Committee other than in relation to minor amendments; in particular, the Paragraph was unchanged, other that the figure for the July capital raise had been corrected from £300m to £303m. Mr Arden confirmed in cross-examination that the Q3 Update had not previously been reviewed by Linklaters or shared with the PRA.

218.

There is no record, either in Mr Arden’s contemporaneous notes or in the minutes, to the RWA issue having been discussed by the Board in the context of the Q3 update. The Applicants’ evidence was as follows:

(1)

Mr Donaldson said he had “pointed out [to the Board] that it was the numbers that were in COREP and the board had already been told that the COREP was not changing until we had concluded the work with Deloitte”. When asked by Mr Stanley if the Board had been told that the numbers were incorrect, he said “they were the correct numbers that everybody was aware of and were agreed with the PRA” and that the Board knew “there was an issue to be worked through”. He later added that “everybody knows you use the numbers from the COREP in your announcements” and “it was the best number we had”.

(2)

Mr Arden said (our emphasis) that the RWAs “would have been part of the conversation”. He thus did not say that the RWAs “were” part of the conversation, but instead used the conditional voice. He also said that the lack of any documentary record of the Board being informed of the RWAs as part of the Q3 Update “doesn’t mean it didn’t happen”.

(3)

When Mr Arden was interviewed by the Authority, he was asked if any consideration had been given by the Board to “putting any qualifier” around the figure of £7,398m, and he said “the honest answer is no, we didn’t consider a qualifier”, and he confirmed this in cross-examination.

219.

We find as a fact that there was no discussion at the Board about the RWAs in the context of the Q3 Update because:

(1)

there was no contemporaneous evidence that they were discussed, either in the minutes or in Mr Arden’s own notes;

(2)

Mr Arden did not give evidence that they were discussed;

(3)

the absence of any discussion is consistent with Mr Donaldson’s position that the RWA figures in the Update were correct because they were the same as the figures used in the COREP reporting, and the PRA had agreed with that approach; and

(4)

the absence of discussion was consistent with the Board failing to consider whether to qualify the figure.

220.

Other points of note in the Q3 Update include the following:

(1)

The following figures for gross loans and advances to customers as at 30 June 2018 were provided:

Commercial loans	£3,905m
Residential mortgages	£7,889m
Other	£259m

(2)

Under the heading “Outlook”, the Update included this sentence: “there is no update to the AIRB application for residential mortgages submitted earlier this year and we still expect an outcome in 2H19”.

221.

The Board formally approved the release of the Q3 Update to the market at 7am the following morning.