SS3/21 - Non-systemic UK banks: The Prudential Regulation Authority’s approach to new and growing banks

Supervisory statement SS3/21
First published on 15 April 2021

This Supervisory Statement (SS) provides an overview of how the Prudential Regulation Authority’s (PRA)’s supervisory expectations of ‘new and growing’ non-systemic UK-incorporated banks (collectively referred to as ‘banks’), evolve as they grow from the point of authorisation to being regarded as fully established banks. 

  • Chapter 2 provides background on progress to date with new bank authorisations; common issues of new and growing banks; and an overview of how the PRA’s supervisory approach evolves as banks grow and develop.
  • Chapter 3 provides further detail on supervisory expectations of new and growing banks with a focus on common issues including business model, governance, risk management and controls. 
  • Chapter 4 sets out the PRA’s expectations for capital management in new and growing banks, and includes a revision and simplification of the PRA methodology for calibrating the PRA buffer for these banks. 
  • Chapter 5 sets out the PRA’s and the Bank of England’s coordinated approach to ensuring new and growing banks can exit the market in an orderly manner.
  • Chapter 6 sets out the PRA’s supervisory approach once banks become established.

This SS is relevant to the following types of banks:

  • banks in their first few years of being authorised by the PRA as a deposit-taker (typically less than five years post-authorisation); and
  • prospective banks interested in and currently applying for authorisation as a deposit-taker (UK applicant banks).

This SS should be read in conjunction with:

  • the PRA’s approach to banking supervision;
  • the following joint Bank / Financial Services Authority (FSA) publications: ‘A review of requirements for banks entering into or expanding in the banking sector (the 2013 report)’; and ‘A review of requirements for banks entering into or banks expanding in the banking sector: one year on (the 2013 report plus one year)’;
  • SS31/15‘The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)’; and 
  • the Pillar 2 Statement of Policy (SoP) ‘The PRA’s methodologies for setting Pillar 2 capital’.

Future version

Published on 12 March 2024. Effective from 1 October 2025