The PRA published a policy statement (PS6/25) on 20 May 2025, confirming updates to its supervisory requirements and branch reporting for international banks which are currently set out in Supervisory Statement 5/21.
The PRA previously consulted on updates to its branch risk appetite, booking model expectations, and branch liquidity reporting requirements through CP11/24, in response to the failure of Silicon Valley Bank and the outcomes of the ECB’s Desk Mapping Review (DMR).
PS6/25 broadly confirms the introduction of updates to SS5/21 as consulted, with targeted changes and clarifications made to reflect industry feedback. These include:
increasing two indicative branch risk appetite thresholds by 30%; to £130m and £650m
amending the definition of certain thresholds to no longer include references to transactional deposits, and reporting data to no longer require transactional breakdown
clarifying the scope of application of booking model expectations and modifying booking responsibility language
providing flexibility and clarifications on liquidity reporting
With respect to booking models, firms are expected to complete a self-assessment against the revised PRA expectations.
In this article
What does this mean?
Branch Risk Appetite
In CP11/24, the PRA proposed amendments to its approach to assessing when an international bank is required to operate as a subsidiary in the UK. The PRA confirms the introduction of a new indicative threshold of £300m in total retail and small company deposits, beyond which a bank may be required to operate as a subsidiary.
To account for the impact of cumulative inflation in recent years, the PRA also confirms that the two existing FSCS-linked deposit thresholds - £100m deposits in FSCS- covered transactional and instant access accounts and £500m total FSCS-covered deposits - will be uplifted by 30% to £130m and £650m, respectively.
Feedback to the consultation highlighted the associated costs with identifying and reporting transactional deposit balances. To address this, the PRA is simplifying the wording of the £100m (now £130m) and new £300m thresholds by removing references to transactional deposits, so the thresholds will solely refer to instant access deposits. The PRA is also implementing changes to no longer require branches to routinely report transactional deposit data to the PRA, however firms will need to retain the capability to identify transactional accounts if requested by the PRA.
The PRA also confirms the implementation date for the reporting of deposits and whole-firm liquidity has been extended from 31 December 2025 to H1 2026. Firms are required to use the revised version of the Branch Return form for the first time for their data as at 30 June 2026.
In relation to the definition of High Net Worth Individuals (HNWI) and the PRA’s risk appetite for HNWI-deposits, the PRA maintains its proposals in CP11/24, however provides additional clarity on the factors it will consider in its assessment of firms’ deposit base, including the ‘look-through’ approach to HNW deposits held by non-individuals.
Booking models
The PRA’s expectations on booking models apply to international banks and UK banks with investment banking or sales and trading activities in both the UK and internationally. The PRA reiterates its continued “proportionate and flexible” approach to booking arrangements, with its priority remaining the “protection of efficient prudential practices, including the use of centralised risk management and the judicious reliance on group resources”.
Industry feedback to the consultation raised challenges associated with potential conflict between the PRA’s and other regulators’ booking model expectations and requested the PRA consider establishing formal mechanisms to resolve these differences. In response, the PRA acknowledges the industry’s concerns, but confirms it will continue to work cooperatively and collaboratively with home or other host regulators rather than establish more formalised approaches, such as trilogue or arbitration mechanisms.
The PRA is also introducing revisions to SS5/21 to update and clarify its expectations in relation to split desks, single consolidated risk functions, trader controls, pre-existing control weaknesses and remote booking/back-to-back trading.
The PRA’s updated expectations aim to ensure that where a firm operates split desks that suitable risk management mitigants are in place, including through consolidated risk management. The PRA also reinforces the importance of oversight of remote booking into the UK and robust trader controls.
The PRA also states that it expects firms to consider its expectations in the context of any changes in booking models as a result of Article 21c of CRD VI, where the impacted banking book activities are in scope (the PRA is of the view that some banking book activities closely related to investment banking activities are likely to be in scope).
The PRA expects firms to undertake a self assessment against the updated SS5/21 booking model expectations, but clarifies that it does not anticipate that firms will need to amend existing booking structures that implement the outcomes of the DMR. It also clarifies that the notification of material booking changes is intended to form part of the firm’s ongoing supervisory dialogue and it provides further examples of ‘material’ instances that it would expect to be discussed.
Liquidity reporting
Feedback to the consultation generally welcomed the PRA’s proposals to streamline the whole firm liquidity data it collects from firms. The PRA plans to take forward the changes broadly as consulted, with clarifications in some areas as well as an extension to reporting implementation timelines.
In particular, the PRA clarifies that in instances where data is not available within its Branch Return submission timelines, firms should provide the most recent data points available as submitted to the home state supervisor. It also clarifies its expectations on reporting in stress conditions and exceptions where confidentiality restrictions may be in place.
To allow firms more time to implement the changes to their reporting systems and processes and align with the whole firm’s reporting processes, the PRA has extended the implementation date of reporting changes to 1 March 2026.
What do firms need to do?
Undertake a self-assessment on the PRA’s revised booking model expectations.
Prepare to meet additional liquidity reporting requirements.
Consider impact of PRA’s changes on future business strategy and growth.
All firms in scope should assess their booking model arrangements against the PRA’s revised expectations, documenting any gaps and the plans to address them. Firms should ensure that appropriate governance and controls should be in place to monitor material booking model changes and firms should be prepared to engage early with the PRA where any changes are planned.
Firms should begin to make the necessary operational changes to comply with the PRA’s new Branch Return submissions, including ensuring that appropriate preparations are undertaken to align with the group’s reporting framework, where relevant.
Although the PRA does not expect the updates to its bank branch criteria to require any existing branch to subsidiarise, firms should consider the impact of the PRA’s additional indicative criteria and updated expectations on current and future growth projections.
Next steps
The PRA’s new supervisory expectations take effect immediately on publication on 20 May 2025. Firms are expected to undertake a self-assessment against the revised expectations to a timeline agreed with their PRA supervisory contact.
Changes to branch reporting and the related updated guidance will take effect from 1 March 2026.
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