On 2 April 2025, the Prudential Regulation Authority (PRA) imposed a financial penalty of £72,000 on George Jay Hambro, a former Notified Non-Executive Director (NED) of Wyelands Bank Plc (Wyelands) for breaching Individual Conduct Rule 2, which requires individuals to act with "due skill, care and diligence".
Background
Wyelands is a category 4 UK deposit-taker authorised and regulated by the PRA and Financial Conduct Authority (FCA) and is part of the Gupta Family Group (GFG) alliance of global businesses.
In April 2023, the PRA issued a final notice censuring Wyelands. It found that four structured transactions entered into by Wyelands exceeded the large exposure limits and that it had inaccurately reported its large exposures to the PRA. The PRA also identified two occasions where Wyelands had received capital injections which were indirectly funded by Wyelands and were inaccurately reported to the PRA as Common Equity Tier 1 capital. Finally, the PRA found that Wyelands had failed to take sufficient care to ensure its Engagement Policy which was introduced to manage potential risks of conflicts of interest between Wyelands and other GFG businesses.
Subsequently, the PRA also took action against Iain Mark Hunter, the CEO of Wyelands in the relevant period. A final notice was published on 10 January 2024 where he was fined £118,808.
Most recently, on 2 April 2025, the PRA published the final notice against Mr Hambro, where it decided that:
- Mr Hambro's conduct contributed to the receipt by Wyelands of a £10m capital injection which it had indirectly funded, and which therefore did not qualify as capital for regulatory purposes.
- Mr Hambro failed to make sufficient inquiries as to the date of the resignation of an executive director from a GFG company. This information was relevant to the characterisation of that company as a connected party and hence assessment of whether Wyelands was in breach of the applicable large exposure limit.
- Mr Hambro failed to take steps to ensure compliance with Wyelands' Engagement Policy when he was involved in proposing transactions between Wyelands and members of the GFG group.
Penalty
The PRA ordinarily calculates penalties by applying a formula based on the individual's relevant income. Mr Hambro's role at Wyelands was not remunerated; however, the PRA was able to base its calculation on a proportion of Mr Hambro's GFG remuneration which it considered fairly reflected the amount of time Mr Hambro was required to devote to Wyelands. However, having done so, it then considered the figure was insufficient to effectively deter the individual and others from committing further or similar breaches. As such, it applied a 300% increase in reaching its final figure.
Although Mr Hambro settled this case with the PRA, it was outside the Discount Stage window which would have entitled Mr Hambro to a 30% discount on penalty and therefore no discount applies.
Comment
The PRA (and FCA) has tended to focus efforts on ensuring compliance of executive directors and senior management. However, this case demonstrates that regulators also place emphasis on the conduct of NEDs – particularly where the NED (as in this case) has wider responsibilities in the bank's group, of which the bank is a member.
All directors (not just those holding senior management responsibilities) should proactively ensure they are always acting with due skill, care and diligence in overseeing the conduct of the firm's business and ensuring the safety and soundness of the firm they are working for. It is also crucial for NEDs to understand their responsibilities and potential implications of non-compliance.