PRA Policy Statement 6/25: updates to the PRA's framework for international banks

Our view

The failure of Silicon Valley Bank ("SVB") in March 2023 amongst other matters resulted in the PRA's publication of CP11/24 with regards to its framework for international banks, particularly with the recent conversion of SVB from branch to subsidiary. There was widespread consensus that the PRA's monitoring and enforcement against this framework demonstrated the considerable benefits of the PRA's risk appetite and the framework itself. It therefore comes as no surprise that both CP11/24 and PS6/25 reflect refinement of the existing framework, as opposed to 'ground breaking' change. 

What are the changes?

The following changes have come into immediate effect as of 20^th May 2025:

• Branch risk appetite: the PRA has increased the below thresholds to mirror inflation (30%) since initial calibration, as well as a new additional indicative threshold, reflecting the point at which banks would be expected to operate as a subsidiary as opposed to a branch:
  • £130mn (up from £100mn) for retail and small company deposits in transactional or instant access accounts which are covered by the FSCS;
  • £650mn (up from £500mn) in relation to total FSCS-covered deposits; and
  • A newly-introduced threshold of £300mn in total retail and small company deposits.
• Booking models: the PRA proposes to continue its "proportionate and flexible" approach to booking arrangements, prioritising the "protection of efficient prudential practices, including the use of centralised risk management and the judicious reliance on group resources". The PRA also makes revisions to SS5/21 in respect of split desks, single consolidated risk functions, trader controls, pre-existing control weaknesses and remote booking / back-to-back trading.
• Liquidity reporting: the PRA has provided flexibility on the reporting as-at dates that banks can use for the provision of liquidity information where there is a mismatch between the PRA's Branch Return submission deadlines and the Home State Supervisor's requirements, postponed the implementation of revised Branch Return reporting rules (with effect from 1^st March 2026) and clarified reporting expectations in stress, the scope of whole-firm reporting, and certain reporting definitions. This has been done with the purpose of reducing the burden of regulatory reporting.

What should banks be doing?

Firms, or international banks looking to set-up branches or subsidiaries in the UK, should take the following actions:

• Consider the potential impact of the various revised thresholds against their projected growth of deposits or strategic ambitions, and plan to engage with the PRA accordingly;
• Review booking model practices and against the revised PRA expectations set out in PS6/25 and ensure that these have been documented accordingly with appropriate governance and oversight, with any remedial actions taken; and
• Ensure that they are able to report in line with the revised liquidity requirements as of 1^st March 2026.

Should you require support or a follow-up conversation in relation to any of the themes discussed above in relation to PS6/25, our team of experienced industry practitioners and former regulators are well-positioned to support. Do please feel free to reach out to Harry Howe (Harry.Howe@dwf.law) for a follow-up conversation.

References

[1] PS6/25 – International firms: Updates to SS5/21 and branch reporting | Bank of England

[2] CP11/24 – International firms: Updates to SS5/21 and branch reporting | Bank of England

[3] International banks: The PRA's approach to branch and subsidiary supervision