Santander was fined after the regulatory body found serious and persistent gaps in its anti-money laundering (AML) controls, affecting its business banking customers.

Between 31st December 2012 and 18th October 2017, the bank failed to properly oversee and manage its AML systems, which significantly impacted the account oversight of more than 560,000 business customers.  

Santander had ineffective systems to adequately verify the information provided by customers about the business they would be doing.

The firm also failed to properly monitor the money customers declared would be going through their accounts, compared to the actual sums being deposited.

In addition, there were examples of the bank failing to promptly deal with red flags associated with suspicious activity, such as automated monitoring alerts.  

These failures led to more than £298m passing through the bank before it closed the accounts.

While Santander began a programme of AML system improvements in 2013 — which resulted in some changes — it concluded that these did now adequately address the underlying weaknesses and, in 2017, decided to implement a comprehensive restructuring of its processes and systems. 

The bank has not disputed the FCA’s findings and agreed to settle, qualifying for a 30% discount to the original penalty of over £153.9m.

The firm continues to invest in its ongoing transformation and remediation programme.

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Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Santander’s poor management of its AML systems and its inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime. 

“As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper AML controls.”

Meanwhile, Metro Bank was fined for breaching the listing rules by publishing incorrect information to investors.

According to the FCA, the bank published incorrect information concerning its Risk Weighted Assets (RWA) figure in its third quarter trading update on 24th October 2018, and failed to qualify it or explain that it was subject to an ongoing review and would require a substantial correction. 

It also did not consider and seek legal advice on whether the incorrect RWA figure ought to be qualified or explained in the October trading update — thus failing to take reasonable care to ensure the update was not false and misleading and did not omit relevant information.  

When the correct RWA figure was announced in January 2019, it contributed to a 39% fall in Metro Bank’s share price.

The FCA has also decided to fine Metro Bank’s former CEO Craig Donaldson and former CFO David Arden £223,100 and £134,600, respectively, for being knowingly concerned in the breach.

While the two former executives have referred their respective decision notices to the Upper Tribunal, where they will each present their case, the bank itself chose not to do this.