The Prudential Regulation Authority (PRA) has fined Mr George Jay Hambro, a former notified non-executive director (Notified NED) of Wyelands Bank Plc (Wyelands), £72,000 for breaching PRA Individual Conduct Rule 2 in relation to three matters. This rule states that ‘You must act with due skill, care and diligence.’

Mr Hambro’s conduct between 3 July 2017 and 19 February 2020 fell below the standards expected of a person in his position in an authorised firm and demonstrated a serious lack of due skill, care and diligence in relation to: the recognition of capital, large exposures assessments, and Wyelands’ internal policy (its Engagement Policy) to manage potential risks of conflicts of interest between Wyelands and the wider GFG Alliance (GFG).

Mr Hambro has accepted his failings set out in the Notice and expressed his regret for those failings.

Today’s announcement follows on from the PRA’s decisions (i) in April 2023 to publicly censure Wyelands for significant regulatory failings and (ii) in January 2024 to fine Mr Iain Mark Hunter, the former Wyelands CEO, £118,808 for breaching three PRA Conduct Rules. Wyelands entered wind down in March 2020, subsequently repaid its unconnected depositors at the direction of the PRA and surrendered its PRA authorisation in April 2024.

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said:

‘We have taken this action against Mr Hambro because his breaches and failings contributed to creating prudential risks which threatened the safety and soundness of Wyelands Bank.’

As set out in the Final Notice, Mr Hambro breached Individual Conduct Rule 2 when he failed to:

• make the inquiries he should have made as to the appropriateness of the funding mechanism in relation to a £10 million capital injection into Wyelands, which was indirectly funded from the proceeds of a loan Wyelands had made to a third party. His failure in this respect contributed to Wyelands reporting that capital to the PRA as Common Equity Tier 1 capital when it was not;
• make sufficient inquiries as to the date of a GFG executive’s resignation as a director of a GFG entity, before Mr Hambro gave instructions to another GFG executive to record the date of the first GFG executive’s resignation. Mr Hambro understood the resignation date was relevant to Wyelands’ and the PRA’s assessments as to whether Wyelands was in breach of the large exposures limit applicable to it; and 
• take steps to ensure the Wyelands’ Engagement Policy was complied with when he was involved in proposing transactions or potential transactions as between Wyelands and GFG members or business associates of GFG.

Mr Hambro agreed to resolve this matter with the PRA and the fine imposed by the PRA is £72,000. The penalty includes a material adjustment for deterrence. Mr Hambro agreed to settle this matter after the end of the discount period and does not qualify for a reduction of 30% in the fine.

Background

1. Final Notice to George Jay Hambro
2. PRA Final Notice to Wyelands Bank Plc
3. PRA Final Notice to Iain Mark Hunter
4. Individual Conduct Rules
5. The Capital Requirements Regulation (CRR) sets out the eligibility requirements for Common Equity Tier 1 (CET1) capital for capital purposes. The CRR defines certain characteristics or qualities which capital must have (or not have) to be eligible CET1 capital (i.e., with good loss-absorbing properties). For Wyelands’ CET1 capital, Article 28(1)(b) of the CRR, as in force at the relevant times, stated that “Capital instruments shall qualify as Common Equity Tier 1 instruments only if all the following conditions are met … (b) the instruments are paid up and their purchase is not funded directly or indirectly by the institution”.
6. A “large exposure” is defined in Article 392 of Part IV of the EU Capital Requirements Regulation (No 575/2013) (CRR) as a firm’s exposure to a client or group of connected clients where the value of the exposure is equal to or exceeds 10% of the firm’s eligible capital. Article 392 is now incorporated into the PRA Rulebook.
7. Large exposure limits refers to Article 395 of Part IV of the CRR which stated (so far as relevant): ‘An institution shall not incur an exposure... to a client or group of connected clients the value of which exceeds 25% of its eligible capital...’. Article 395 is now incorporated into the PRA Rulebook.