The Financial Conduct Authority (FCA) has recently announced that it has fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for “serious weaknesses in its anti-money laundering (AML) systems and controls” that lasted from October 2014 to July 2019.
GT Bank is a wholly owned subsidiary of Nigerian Guaranty Trust Bank Plc, which is itself a wholly owned subsidiary of Guaranty Trust Bank Holding Company Plc, an international financial services institution offering banking services across the UK and Africa. It opened its London office in May 2008 and offers banking products and services to a range of private, corporate and institutional clients.
In a statement published on 10 January 2023, the FCA said it found serious weaknesses in GT Bank’s AML systems and controls, which the bank had failed to remediate despite these weaknesses having been “repeatedly highlighted” to it by the FCA and other internal and external sources. This is not the first time that GT Bank has been penalised for failing to meet the standards required by the UK’s financial regulator. In August 2013, GT Bank was fined £525,000 for “serious and systemic failings” in its ability to maintain adequate AML systems and controls between 19 May 2008 and 19 July 2010. It is for this reason that the FCA described GT Bank’s most recent failures as “particularly egregious”.
The rules concerning AML measures are particularly relevant to GT Bank, which has customers based in countries associated with a higher risk of money laundering, corruption and/or bribery, including accounts held by politically exposed persons.
In reference to GT Bank’s failures, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA commented that: “firms must protect themselves and those dealing with them from financial crime risks, especially money laundering. The FCA is determined to ensure the market for financial services is safe, clean and trusted with robust systems and controls in place to stymie financial crime. The FCA will continue to take action when these standards are not met.”
GT Bank has now taken steps to improve its AML controls. The FCA reports that the bank had stopped taking new clients on from the beginning of 2018 and had adopted wider voluntary restrictions later in the year on the recommendation of a Skilled Person report. These restrictions were dropped in mid-2021 after GT Bank completed a remediation plan that had been verified by an independent Skilled Person.
As with the 2013 fine, GT Bank did not dispute the FCA’s findings and agreed to settle. This qualified GT Bank for a 30% discount, reducing the financial penalty by £3,287,900. Fines of this nature form an integral part of the FCA’s three-year strategy to prevent harm and set higher standards within the financial markets.