PRA Meeting held by the Arab Bankers Association in London

Andrew Woods from BNF London Branch along with over thirty-five other ABA members attended the association’s regular meeting with the Bank of England (the Prudential Regulation Authority) in Mayfair on 18th February.  The PRA was represented by Laura Winchester who is the lead supervisor for BNF at the Bank of England.

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The authority acknowledged that 2025 was likely to be a challenging year for banks, as uncertainty around the new US administration combined with the extended impact of the war in Ukraine and a drop in interest rates.

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It went on to outline its current priorities, which include:

A renewed focus on risk management. This ranged from data risk and the way information is collected and analysed, to risk reduction through good governance and an organisational culture that encompasses both client-facing and internal relationships.  The authority further highlighted the need for strong procedures and well-trained personnel to oversee transactions and monitor their associated hazards.

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Operational and financial resilience. Ensuring that IT systems are robust and protected against possible cyber-attacks or system interruptions. It further highlighted the need for effective and appropriate contingency plans to deal with such incidents, avoiding reliance on centralised resources at head offices.

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The need for caution around the use of deposit aggregators. The PRA reported an exponential increase in their use in recent years and, while acknowledging their appeal, it expressed concerns around the potential risks involved. It identified in particular, the lack of customer loyalty, or any direct relationship between bank and client and the speed with which clients could just exit from relationships. It highlighted further potential problems around liquidity mismatches, with short term customer deposits of three to 12 months, set against advances of medium to longer term client loans.

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The meeting was highly informative and ended with an animated question and answer session.

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