Bank of England’s Prudential Regulation Authority (PRA) updates stance on international firms and branch reporting
Shakeel Aslam · Posted on: May 28th 2025 · read
The Prudential Regulation Authority (PRA), a division of the Bank of England, has published Policy Statement (PS) 6/25, outlining updates to its approach to international firms operating in the UK and revisions to branch reporting requirements.
This statement provides feedback on responses to Consultation Paper (CP) 11/24 and sets forth final rules and policy regarding branch and subsidiary supervision.
The PS 6/25 is primarily relevant to existing or prospective PRA-authorised banks and designated investment firms headquartered outside the UK or part of a non-UK-based group.
Additionally, aspects of Chapter 3, concerning booking models, apply to UK-headquartered banks and designated investment firms with investment banking and/or sales or trading activities both in the UK and overseas.
The PRA reiterated its commitment to responsible openness for international banks operating in the UK, acknowledging the benefits they bring to the UK economy. The authority remains receptive to highly integrated firms operating as branches or subsidiaries, provided they adhere to the expectations set out in Supervisory Statement (SS) 5/21. A range of booking models are acceptable, contingent on firms meeting appropriate standards for prudent risk management.
Key updates from PS 6/25 include:
- Branch Risk Appetite The PRA has introduced additional indicative criteria for determining the appropriateness of operating as a branch versus a subsidiary. The calibration of two existing indicative thresholds for deposits has been increased by 30% to £130 million and £650 million, respectively, to account for inflation since their initial implementation. The definition of one existing indicative threshold (£100 million, now £130 million) and the new £300 million threshold no longer includes references to transactional deposits.
- Booking Models Clarifications have been made to firms' booking arrangements, extending their formal application to a subset of UK banks. Modifications to booking responsibilities and trade capture language have also been implemented.
- Liquidity Reporting Amendments to the PRA branch return aim to enhance the collection of whole-firm liquidity data. Flexibility has been provided on reporting dates for liquidity information where there is a mismatch between PRA submission deadlines and Home State Supervisor requirements. The implementation of revised Branch Return reporting rules has been postponed to H1 2026, with firms required to use the updated form for data as at June 30, 2026. The Branch Return Form has been amended to only require data on instant access deposit balances and customer numbers, removing the routine requirement for transactional breakdown, though firms must be able to provide this information upon request.
The PRA conducted a Cost Benefit Analysis (CBA) for the proposed changes, and while no changes to the draft rules were deemed significant enough to require an updated CBA by statute, the PRA assessed the costs and benefits of the policy changes.
The increase in deposit thresholds is expected to benefit branches by allowing for greater deposit growth while maintaining the PRA's responsible openness approach, contributing to the UK's competitiveness in financial services. Streamlined branch reporting requirements are anticipated to result in modest financial and operational savings for firms.
The new policy updating SS5/21 takes effect immediately upon publication, May 20, 2025. Changes to branch reporting, including SS34/15, reporting guidance for the Branch Return Form, and updated branch reporting rules, will take effect from March 1, 2026.
