Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00185 (TCC)

Fecha: 09-Abr-2025

The Tribunal’s view

The Tribunal’s view

289.

We agree with Mr Stanley that it is not credible that the Bank considered it was bound by a requirement of confidentiality not to disclose accurate information about the RWAs in the Q3 Update, and it is also not credible that Mr Donaldson or Mr Arden took that view at the time. That is for the reasons given by Mr Stanley, to which we add the following:

(1)

The discussions with the PRA about Pillar 2A and the AIRB application concerned the exercise by the PRA of a discretion which they were still considering. Whether, and if so when, that future discretion would be exercised was unknown, and that decision was a matter for the PRA.

(2)

There is a fundamental difference between the Bank’s discussions with the PRA about those two matters, and informing the PRA that the Bank had made an historic error in the categorisation of its CLIP loans which it was remediating.

(3)

The decision not to amend the COREP reporting was made by the Bank, and Mr Arden informed the PRA of that decision. Mr Sutherland simply accepted the approach the Bank had decided to take, see §§160-161.

(4)

In its reply to the PSM letter, the Bank:

(a)

did not even respond to the PRA’s criticism of its public statements about the Pillar 2 offset, see §234; and

(b)

its statement that the Bank’s public referencing of the AIRB discussions “merely restated the PRA’s published guidelines” was incorrect: the Bank told the market in the half-year update that:

“We anticipate receiving capital relief as part of the Pillar 2A offset…ahead of transitioning to the advanced internal ratings based approach (AIRB) on residential mortgages, expected H2 2019.”

(5)

The statements to analysts on 24 October and 2 November 2018 that “our application for AIRB is with the PRA, and our expectation remains that that will be an H219 event” was exactly the sort of public disclosure that the PRA was asking the Bank not to make.

290.

In any event, if the Bank and the Applicants had considered they were bound by confidentiality, such a position would not have been reasonable. The reasonable financial institution would have distinguished between informing the PRA that it had made an historic error which it was remediating, and asking the PRA to exercise various discretions in the future.